RANDOM & ERISA Flashcards
an IA must disclose what in Form ADV
10 years of business experience
control persons
audited balance sheet
scope of authority over client funds
manner of compensation
Registration process for a BROKER DEALER
- file application
- pay filing fee
- consent to service
- registration is effective 30 days after application
- expires on December 31st unless renewed
- Administrator may set minimum capital requirement
- Administrator may require surety bond if has custody or discretion
If there is a MERGER, ACQUISITION or SALE of BD, what is waived for the successor firm when submitting application?
the FILING FEE
Regulation D is one of the few transactions that doesn’t need to be…
REGISTERED under 1933 or the USA
Are you an AGENT if you transact business with EXISTING customers who are NOT residents of the state?
NO
Are you an AGENT if you represent the ISSUER in an EXEMPT TRANSACTION?
NO
An agent that works for a WINERY and gives a tour so you can invest in the WINERY. He represents the ISSUER.
How do you become an AGENT of a BROKER DEALER?
- file application
- pay filing fee
- consent to service
- registration is effective 30 days after administrator received notice
- expires on December 31st unless renewed
ABC test for Investment Advisor (FIRM)
A- advice
B- business
C- compensation
amounts allowed to contribute to CAMPAIGNS
$350 - Investment Advisor Rep (able to vote)
$150 - not able to vote
$250- broker dealers
Defined contribution plan for a SMALL BUSINESS OWNER
SIMPLE 401(k)
What type of plan can only be opened by BUSINESSES with NO EMPLOYEES?
SOLO 401(k)
What OTHER person can be included in a SOLO 401(k)?
SPOUSES
In what type of plan MUST an EMPLOYER contribute the a FIXED PERCENTAGE of the employees salary?
MONEY PURCHASE PLANS
Retirement plan for non-profits and public school systems.
403(b)
Also called tax-deferred annuities
tax-sheltered annuities
403(b) can only be invested in
annuity contracts
custodial accounts holding mutual fund shares
retirement income accounts
popular plan for SELF-EMPLOYED individuals
SEP IRA
retirement plan for self-employed individuals AND MUST include employees that meet certain requirements AND MUST contribute equal percentage to employees as to self
KEOGH
NON-QUALIFIED PLANS
payroll deduction
deferred compensation
457 plans
Allows employees to purchase life insurance, mutual funds and annuities through after-tax deductions from their paycheck
PAYROLL DEDUCTION PLANS
non-qualified plan offered to government, public school system
GOVERNMENTAL 457 PLAN
non-qualified plan offered to private colleges and labor unions
NON-GOVERNMENTAL 457 PLAN
When investors don’t select an
investment in a qualified retirement account, the sponsor MUST invest in a:
QDIA - qualified default investment alternative
Eligibility requirements for QUALIFED plans
21 or older and must be FULL TIME for ONE YEAR (1000 hours)
21 or older and have provided THREE CONSECUTIVE YEARS of service worked at least 500 hours
Test that ensures that qualified retirement plan participants who are identified as “key employees” don’t receive a disproportionate amount of benefits when compared to
“non-key employees
TOP-HEAVY TEST
Rule that states that ownership of assets of a qualified plan bust stay within the jurisdiction of the United States
Rule 404(b)
Rule that governs conduct of fiduciaries of ERISA qualifed plans
Rule 404(c)
What factors determine whether an ERISA plan is diversified properly
purpose of the plan
amount of assets
financial and economic conditions
type of investment
geographical and industry diversification
dates of maturity (if applicable)
What should be included in an IPS (Investment Policy Statement)
investment philosophy
risk tolerance
time horizons
preferred asset classes
rate of return expectations
long-term goals for plan
