IACCP Master 100 Question Comprehensive
Exam 2026/2027 Certification Practice
Questions and Answers
Domain 1: The Advisers Act of 1940, the Registration & the Exemptions (20 Questions)
Sub-Topic: The specific definition of an "Investment Adviser" (4 Questions)
[Multiple Choice] Under Section 202(a)(11) of the Investment Advisers Act of 1940, which of
the following persons meets the statutory definition of an "Investment Adviser"?
A. A certified public accountant who advises clients on tax matters incidental to their financial
statements.
B. A publisher of a financial news magazine that provides generalized investment
recommendations to a subscription list.
C. An attorney who provides securities advice to a select group of high-net-worth clients as a
distinct and separate service from legal representation, for a specific fee.
D. A broker-dealer who receives special compensation for investment advice solely incidental
to the execution of securities transactions.
Answer: C
[CORRECT] Rationale: Section 202(a)(11) defines an investment adviser as any person who, for
compensation, engages in the business of advising others about the value of securities.
Option C describes an attorney who is providing securities advice as a separate service for a
fee, thus meeting the definition. Options A, B, and D describe specific exclusions from the
definition: accountants (advice incidental), publishers (bona fide newspaper/magazine), and
broker-dealers (advice incidental/special compensation test failure).
[Select-All-That-Apply] Which of the following are mandatory elements required to satisfy the
definition of an "Investment Adviser" under Section 202(a)(11)? Select all that apply.
A. The person receives compensation for the advice.
,B. The advice is provided regarding the value of securities or the advisability of investing in
securities.
C. The person is registered as a broker-dealer under the Securities Exchange Act of 1934.
D. The person engages in the business of advising, meaning advice is a regular part of their
business.
Answer: A, B, D
[CORRECT] Rationale: The definition of an investment adviser has three distinct prongs: (1)
providing advice regarding securities (B), (2) "for compensation" (A), and (3) engaging in the
"business" of advising (D). Registration as a broker-dealer (C) is not a requirement to be an
investment adviser; in fact, it is a separate registration regime, though dual-registration is
permitted.
[True/False] A bank that offers investment advice to its customers through a dedicated trust
department is defined as an "Investment Adviser" under Section 202(a)(11) and must register
with the SEC.
A. True
B. False
Answer: B
[CORRECT] Rationale: This is False. Section 202(a)(11)(A) specifically excludes banks from the
definition of an "Investment Adviser." Therefore, banks are not required to register as
investment advisers under the Advisers Act, though their trust departments and employees
are subject to other regulatory frameworks.
[Multiple Choice] An individual operates a website called "TechStocks Daily," publishing a
weekly list of recommended technology stocks for a monthly subscription fee of $50. The site
does not tailor advice to individual clients. Under the "publisher's exclusion," is this individual
an investment adviser?
A. Yes, because the advice is specific to securities and involves compensation.
B. No, because the advice is provided through a "bona fide newspaper or magazine" and is
not tailored to the specific needs of individual clients.
C. Yes, because the subscription fee constitutes "special compensation" which negates the
publisher's exclusion.
D. No, because the website is not a registered broker-dealer.
,Answer: B
[CORRECT] Rationale: Under Section 202(a)(11)(D), publishers of bona fide newspapers, news
magazines, or financial publications of general and regular circulation are excluded from the
definition. The key factor is that the advice is impersonal (not tailored to the individual
portfolio needs of a specific client) and disseminated to a general audience.
Sub-Topic: The distinction between SEC-registered and Exempt Reporting Adviser (ERA) (4
Questions)
[Multiple Choice] An adviser manages $145 million in assets, consisting solely of assets of
private funds. The adviser has no separate managed accounts. Which of the following
registration statuses is appropriate for this adviser?
A. SEC-registered Investment Adviser.
B. Exempt Reporting Adviser (ERA).
C. State-registered Investment Adviser.
D. Exempt from any filing requirements entirely.
Answer: B
[CORRECT] Rationale: Under the Dodd-Frank Act, an adviser that solely advises private funds
and has assets under management of less than $150 million is eligible to register as an
Exempt Reporting Adviser (ERA). Since the adviser manages $145 million, they are below the
threshold for mandatory SEC registration (which would be $150M or more) but must still file
reports via Form ADV as an ERA.
[Multiple Choice] What is the primary regulatory difference between an SEC-registered
adviser and an Exempt Reporting Adviser (ERA) regarding the Form ADV?
A. An ERA is not required to file Form ADV Part 1.
B. An SEC-registered adviser must complete all of Form ADV Part 1, whereas an ERA is exempt
from Items 5, 6, and 7 of Part 1 related to the calculation of assets under management and
client types.
C. An ERA does not have to file Form ADV Part 2A (the Brochure).
D. An SEC-registered adviser files Form ADV with FINRA, while an ERA files with the state.
Answer: B
, [CORRECT] Rationale: ERAs file a shortened version of Form ADV Part 1. They are specifically
exempted from completing Items 5 (Information About Your Advisory Business), 6 (Other
Business Activities), and 7 (Financial Industry Affiliations), largely because these sections deal
with AUM calculations and client types that are specifically relevant to full registrants.
[True/False] An adviser qualifies as a Venture Capital Fund Adviser and manages $180 million
in assets. Because the adviser solely advises venture capital funds, the adviser is prohibited
from registering with the SEC and must remain an Exempt Reporting Adviser.
A. True
B. False
Answer: B
[CORRECT] Rationale: This is False. A Venture Capital Fund Adviser may choose to register
with the SEC voluntarily, or they may rely on the exemption to remain an ERA. While they are
exempt from mandatory registration, they are not prohibited from registering if they choose
to do so (subject to certain conditions and benefits).
[Multiple Choice] An Exempt Reporting Adviser (ERA) experiences a sudden influx of capital,
raising its Regulatory Assets Under Management (RAUM) to $160 million. The adviser solely
advises private funds. Which action must the adviser take?
A. Remain an ERA because the exemption for private fund advisers is permanent once
established.
B. File for full SEC registration within 60 days of crossing the $150 million threshold.
C. Register with the state securities commission immediately.
D. Decrease AUM below $150 million within 90 days to maintain ERA status.
Answer: B
[CORRECT] Rationale: If an ERA exceeds the $150 million assets under management threshold,
they are no longer eligible for the private fund adviser exemption and must transition to full
SEC registration. The rule requires the adviser to apply for registration within 60 days of
exceeding the threshold.
Sub-Topic: The "Brochure Rule" (Form ADV Part 2A) (4 Questions)
[Select-All-That-Apply] Under Rule 204-3 (the Brochure Rule), which of the following pieces of
information must be included in Form ADV Part 2A? Select all that apply.
Exam 2026/2027 Certification Practice
Questions and Answers
Domain 1: The Advisers Act of 1940, the Registration & the Exemptions (20 Questions)
Sub-Topic: The specific definition of an "Investment Adviser" (4 Questions)
[Multiple Choice] Under Section 202(a)(11) of the Investment Advisers Act of 1940, which of
the following persons meets the statutory definition of an "Investment Adviser"?
A. A certified public accountant who advises clients on tax matters incidental to their financial
statements.
B. A publisher of a financial news magazine that provides generalized investment
recommendations to a subscription list.
C. An attorney who provides securities advice to a select group of high-net-worth clients as a
distinct and separate service from legal representation, for a specific fee.
D. A broker-dealer who receives special compensation for investment advice solely incidental
to the execution of securities transactions.
Answer: C
[CORRECT] Rationale: Section 202(a)(11) defines an investment adviser as any person who, for
compensation, engages in the business of advising others about the value of securities.
Option C describes an attorney who is providing securities advice as a separate service for a
fee, thus meeting the definition. Options A, B, and D describe specific exclusions from the
definition: accountants (advice incidental), publishers (bona fide newspaper/magazine), and
broker-dealers (advice incidental/special compensation test failure).
[Select-All-That-Apply] Which of the following are mandatory elements required to satisfy the
definition of an "Investment Adviser" under Section 202(a)(11)? Select all that apply.
A. The person receives compensation for the advice.
,B. The advice is provided regarding the value of securities or the advisability of investing in
securities.
C. The person is registered as a broker-dealer under the Securities Exchange Act of 1934.
D. The person engages in the business of advising, meaning advice is a regular part of their
business.
Answer: A, B, D
[CORRECT] Rationale: The definition of an investment adviser has three distinct prongs: (1)
providing advice regarding securities (B), (2) "for compensation" (A), and (3) engaging in the
"business" of advising (D). Registration as a broker-dealer (C) is not a requirement to be an
investment adviser; in fact, it is a separate registration regime, though dual-registration is
permitted.
[True/False] A bank that offers investment advice to its customers through a dedicated trust
department is defined as an "Investment Adviser" under Section 202(a)(11) and must register
with the SEC.
A. True
B. False
Answer: B
[CORRECT] Rationale: This is False. Section 202(a)(11)(A) specifically excludes banks from the
definition of an "Investment Adviser." Therefore, banks are not required to register as
investment advisers under the Advisers Act, though their trust departments and employees
are subject to other regulatory frameworks.
[Multiple Choice] An individual operates a website called "TechStocks Daily," publishing a
weekly list of recommended technology stocks for a monthly subscription fee of $50. The site
does not tailor advice to individual clients. Under the "publisher's exclusion," is this individual
an investment adviser?
A. Yes, because the advice is specific to securities and involves compensation.
B. No, because the advice is provided through a "bona fide newspaper or magazine" and is
not tailored to the specific needs of individual clients.
C. Yes, because the subscription fee constitutes "special compensation" which negates the
publisher's exclusion.
D. No, because the website is not a registered broker-dealer.
,Answer: B
[CORRECT] Rationale: Under Section 202(a)(11)(D), publishers of bona fide newspapers, news
magazines, or financial publications of general and regular circulation are excluded from the
definition. The key factor is that the advice is impersonal (not tailored to the individual
portfolio needs of a specific client) and disseminated to a general audience.
Sub-Topic: The distinction between SEC-registered and Exempt Reporting Adviser (ERA) (4
Questions)
[Multiple Choice] An adviser manages $145 million in assets, consisting solely of assets of
private funds. The adviser has no separate managed accounts. Which of the following
registration statuses is appropriate for this adviser?
A. SEC-registered Investment Adviser.
B. Exempt Reporting Adviser (ERA).
C. State-registered Investment Adviser.
D. Exempt from any filing requirements entirely.
Answer: B
[CORRECT] Rationale: Under the Dodd-Frank Act, an adviser that solely advises private funds
and has assets under management of less than $150 million is eligible to register as an
Exempt Reporting Adviser (ERA). Since the adviser manages $145 million, they are below the
threshold for mandatory SEC registration (which would be $150M or more) but must still file
reports via Form ADV as an ERA.
[Multiple Choice] What is the primary regulatory difference between an SEC-registered
adviser and an Exempt Reporting Adviser (ERA) regarding the Form ADV?
A. An ERA is not required to file Form ADV Part 1.
B. An SEC-registered adviser must complete all of Form ADV Part 1, whereas an ERA is exempt
from Items 5, 6, and 7 of Part 1 related to the calculation of assets under management and
client types.
C. An ERA does not have to file Form ADV Part 2A (the Brochure).
D. An SEC-registered adviser files Form ADV with FINRA, while an ERA files with the state.
Answer: B
, [CORRECT] Rationale: ERAs file a shortened version of Form ADV Part 1. They are specifically
exempted from completing Items 5 (Information About Your Advisory Business), 6 (Other
Business Activities), and 7 (Financial Industry Affiliations), largely because these sections deal
with AUM calculations and client types that are specifically relevant to full registrants.
[True/False] An adviser qualifies as a Venture Capital Fund Adviser and manages $180 million
in assets. Because the adviser solely advises venture capital funds, the adviser is prohibited
from registering with the SEC and must remain an Exempt Reporting Adviser.
A. True
B. False
Answer: B
[CORRECT] Rationale: This is False. A Venture Capital Fund Adviser may choose to register
with the SEC voluntarily, or they may rely on the exemption to remain an ERA. While they are
exempt from mandatory registration, they are not prohibited from registering if they choose
to do so (subject to certain conditions and benefits).
[Multiple Choice] An Exempt Reporting Adviser (ERA) experiences a sudden influx of capital,
raising its Regulatory Assets Under Management (RAUM) to $160 million. The adviser solely
advises private funds. Which action must the adviser take?
A. Remain an ERA because the exemption for private fund advisers is permanent once
established.
B. File for full SEC registration within 60 days of crossing the $150 million threshold.
C. Register with the state securities commission immediately.
D. Decrease AUM below $150 million within 90 days to maintain ERA status.
Answer: B
[CORRECT] Rationale: If an ERA exceeds the $150 million assets under management threshold,
they are no longer eligible for the private fund adviser exemption and must transition to full
SEC registration. The rule requires the adviser to apply for registration within 60 days of
exceeding the threshold.
Sub-Topic: The "Brochure Rule" (Form ADV Part 2A) (4 Questions)
[Select-All-That-Apply] Under Rule 204-3 (the Brochure Rule), which of the following pieces of
information must be included in Form ADV Part 2A? Select all that apply.
