Unit 2 (5)

Question 1

If you want to register in a state where you don’t have an office, do you also need to file a consent to service of process?

Answer 1

Yes. Even if you don’t have an office in the state you still need a consent to service of process on file.

Question 2

Which type of advisor has to notify the state when employment has started or stopped?

Answer 2

Only state registered IAs. If the IA was federal covered, the IAR would have to notify the administrator

Question 3

If an IAR of a federal covered advisor is fired or is hired, who’s responsibility is it to notify the administrator?

Answer 3

The IARs responsibility. If the IA had been registered with the statement the IA would let the administrator know

Question 4

Which of the following is NOT exempt from registration as an IAR in the state where they conduct business

1. CFP who prepares financial plans and whose only compensation is commissions
2. Insurance agent who prepares comprehensive financial plans and receives commissions on any insurance products purchased by clients
3. A BD with extensive business in the state
4. A mutual fund with offices and clients in the state

Answer 4

1 and 2. A CFP who prepares financial plans for commissions must register in the state as an IAR. Insurance agent who prepares comprehensive financial plans for commissions is also acting in the capacity of a IAR. BDs and Mutual Funds are not investment advisers

Question 5

If you operate an investment advisory firm as a sole proprietorship, is there an IAR?

Answer 5

Yes, you are both the IA and the IAR

Question 6

Who tells an IAR when their registration starts after passing their exams?

Answer 6

The IA. The administrator tells the IA and the IA tells the IAR

Question 7

Is an IARs registration effective if he isn’t employed by an IA?

Answer 7

No. It’s only effective as long as he’s employed by an IA