IACCP LATEST 2026 STUDY GUIDE QUESTIONS AND
SOLUTIONS RATED A+
✔✔Adviser A and its president, Jones, conduct investment manager searches for
institutional clients. Jones often refers his clients to Adviser B. Adviser B has provided
financing for business ventures owned by Jones. Adviser B has also steered brokerage
business to a brokerage firm owned by Jones' son.
Which action should be taken by Adviser B?
A. Adviser B may rely on disclosure in Adviser A's Form ADV about these business
dealings.
B. None since Jones had made his clients aware of Adviser B's business dealings with
Jones and his son.
C. None since Adviser A's referrals are not influenced by any of these business
dealings.
D. Adviser B should disclose these business dealings in its Form ADV Part 2 because
they are material conflicts of interest. - ✔✔D. Adviser B should disclose these business
dealings in its Form ADV Part 2 because they are material conflicts of interest.
✔✔Investment Adviser manages a portfolio for Mr. Jackson, the President of Jackson
Industries, a publicly traded company. Mr. Jackson informs Portfolio Manager that the
stock price for Jackson Industries will likely decline in value when the quarterly earnings
announcement is made. Portfolio Manager shorts Jackson Industries in his personal
account and makes a large profit. Adviser did not require pre-clearance of these trades
because Adviser does not hold Jackson Industries in client portfolios.
Has Adviser failed to meet its duties under the Advisers Act?
A. Yes, because Adviser must pre-clear all trades by portfolio managers.
B. No, because it was Mr. Jackson who shared nonpublic information.
C. Yes, because Adviser reasonably failed to detect insider trading.
D. No, because Mr. Jackson suffered no losses. - ✔✔C. Yes, because Adviser
reasonably failed to detect insider trading.
✔✔According to Investment Company Act of 1940 Rule 3a-4 (Status of Investment
Advisory Programs), which TWO activities is an adviser required to do? (Choose two.)
A. Notify clients monthly of any investment changes to the model portfolio.
B. Notify the client in writing at least quarterly to contact the adviser if suitability
information has changed.
C. Develop an Investment Policy Statement (IPS) for a client within two weeks of initial
investment.
, D. Make a best effort attempt to contact the client to update suitability information at
least annually. - ✔✔B. Notify the client in writing at least quarterly to contact the adviser
if suitability information has changed.
D. Make a best effort attempt to contact the client to update suitability information at
least annually.
✔✔Which was NOT identified as a requirement for an investment adviser that intends to
allocate an investment opportunity to a proprietary account in a block trade with other
client accounts?
A. The adviser's compliance officer must approve the order in writing.
B. The adviser will prepare, prior to entering the order, a written allocation statement.
C. Transaction costs for the order will be shared pro-rata based on each client's
participation in the transaction.
D. The adviser will identify that the block trade is consistent with its duty to achieve best
execution. - ✔✔A. The adviser's compliance officer must approve the order in writing.
✔✔To fall within the Section 28(e) safe harbor of the Securities Exchange Act of 1934,
which TWO activities are an investment adviser required to do if it pays higher
commissions in order to receive soft dollar products? (Choose two.)
A. Make a good faith determination that commissions paid are reasonable for products
received.
B. Make disclosure in Form ADV Part 2 regarding its soft dollar practices.
C. Document mixed use allocations in writing.
D. Ensure that research is used to benefit all client accounts. - ✔✔A. Make a good faith
determination that commissions paid are reasonable for products received.
B. Make disclosure in Form ADV Part 2 regarding its soft dollar practices.
✔✔Investment Adviser has managed Bob's account for many years. Bob notifies
Investment Adviser that he has recently married Kate, and now Kate's three minor
children are living with them.
What is Investment Adviser required to do?
A. Send Kate a copy of the current Form ADV Part 2.
B. Meet with Kate to discuss her investment strategy.
C. Reassess the suitability of Bob's current investment strategy.
D. Count Kate and her children as separate clients - ✔✔C. Reassess the suitability of
Bob's current investment strategy.
✔✔Investment Adviser is introduced to Client by Broker. Client instructs Adviser in
writing to place 50% trades in Client's account through Broker "subject to best
execution". At the end of the year, Adviser discovers 75% of Client's trades were done
SOLUTIONS RATED A+
✔✔Adviser A and its president, Jones, conduct investment manager searches for
institutional clients. Jones often refers his clients to Adviser B. Adviser B has provided
financing for business ventures owned by Jones. Adviser B has also steered brokerage
business to a brokerage firm owned by Jones' son.
Which action should be taken by Adviser B?
A. Adviser B may rely on disclosure in Adviser A's Form ADV about these business
dealings.
B. None since Jones had made his clients aware of Adviser B's business dealings with
Jones and his son.
C. None since Adviser A's referrals are not influenced by any of these business
dealings.
D. Adviser B should disclose these business dealings in its Form ADV Part 2 because
they are material conflicts of interest. - ✔✔D. Adviser B should disclose these business
dealings in its Form ADV Part 2 because they are material conflicts of interest.
✔✔Investment Adviser manages a portfolio for Mr. Jackson, the President of Jackson
Industries, a publicly traded company. Mr. Jackson informs Portfolio Manager that the
stock price for Jackson Industries will likely decline in value when the quarterly earnings
announcement is made. Portfolio Manager shorts Jackson Industries in his personal
account and makes a large profit. Adviser did not require pre-clearance of these trades
because Adviser does not hold Jackson Industries in client portfolios.
Has Adviser failed to meet its duties under the Advisers Act?
A. Yes, because Adviser must pre-clear all trades by portfolio managers.
B. No, because it was Mr. Jackson who shared nonpublic information.
C. Yes, because Adviser reasonably failed to detect insider trading.
D. No, because Mr. Jackson suffered no losses. - ✔✔C. Yes, because Adviser
reasonably failed to detect insider trading.
✔✔According to Investment Company Act of 1940 Rule 3a-4 (Status of Investment
Advisory Programs), which TWO activities is an adviser required to do? (Choose two.)
A. Notify clients monthly of any investment changes to the model portfolio.
B. Notify the client in writing at least quarterly to contact the adviser if suitability
information has changed.
C. Develop an Investment Policy Statement (IPS) for a client within two weeks of initial
investment.
, D. Make a best effort attempt to contact the client to update suitability information at
least annually. - ✔✔B. Notify the client in writing at least quarterly to contact the adviser
if suitability information has changed.
D. Make a best effort attempt to contact the client to update suitability information at
least annually.
✔✔Which was NOT identified as a requirement for an investment adviser that intends to
allocate an investment opportunity to a proprietary account in a block trade with other
client accounts?
A. The adviser's compliance officer must approve the order in writing.
B. The adviser will prepare, prior to entering the order, a written allocation statement.
C. Transaction costs for the order will be shared pro-rata based on each client's
participation in the transaction.
D. The adviser will identify that the block trade is consistent with its duty to achieve best
execution. - ✔✔A. The adviser's compliance officer must approve the order in writing.
✔✔To fall within the Section 28(e) safe harbor of the Securities Exchange Act of 1934,
which TWO activities are an investment adviser required to do if it pays higher
commissions in order to receive soft dollar products? (Choose two.)
A. Make a good faith determination that commissions paid are reasonable for products
received.
B. Make disclosure in Form ADV Part 2 regarding its soft dollar practices.
C. Document mixed use allocations in writing.
D. Ensure that research is used to benefit all client accounts. - ✔✔A. Make a good faith
determination that commissions paid are reasonable for products received.
B. Make disclosure in Form ADV Part 2 regarding its soft dollar practices.
✔✔Investment Adviser has managed Bob's account for many years. Bob notifies
Investment Adviser that he has recently married Kate, and now Kate's three minor
children are living with them.
What is Investment Adviser required to do?
A. Send Kate a copy of the current Form ADV Part 2.
B. Meet with Kate to discuss her investment strategy.
C. Reassess the suitability of Bob's current investment strategy.
D. Count Kate and her children as separate clients - ✔✔C. Reassess the suitability of
Bob's current investment strategy.
✔✔Investment Adviser is introduced to Client by Broker. Client instructs Adviser in
writing to place 50% trades in Client's account through Broker "subject to best
execution". At the end of the year, Adviser discovers 75% of Client's trades were done
