Michigan Investment Adviser
Representative Exam Questions And
Correct Answers (Verified Answers) Plus
Rationales 2026 Q&A | Instant
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1. Under the Michigan Uniform Securities Act, which of the following persons
is required to register as an investment adviser representative?
A. An individual who performs only clerical duties for a state-registered
investment adviser
B. A solicitor who receives compensation for referring clients to a state-
registered investment adviser
C. An attorney who provides investment advice solely incidental to the
practice of law
D. A certified public accountant who does not receive a separate fee for
investment advice
Answer: B
Rationale: A solicitor compensated for client referrals must register as an
investment adviser representative under Michigan law. Clerical employees
and professionals such as attorneys or CPAs providing advice incidental to
their practice without separate compensation are exempt from
registration. The key element is that the person must be in the business of
providing investment advice or receiving transaction-based compensation
for referrals.
2. A state-registered investment adviser with custody of client funds must
maintain a minimum net worth of:
A. $10,000
B. $25,000
, C. $35,000
D. $50,000
Answer: C
Rationale: Under Michigan’s rules, an investment adviser that has custody
of client funds or securities is required to maintain a minimum net worth
of $35,000. An adviser without custody generally must maintain $10,000.
The higher net worth requirement reflects the increased responsibility and
risk associated with holding client assets.
3. According to Michigan’s recordkeeping rules for investment advisers,
records must be preserved for at least:
A. 3 years, with the most recent 1 year in an easily accessible place
B. 5 years, with the most recent 2 years in an easily accessible place
C. 6 years, with the most recent 3 years in an easily accessible place
D. 7 years, with all records kept in the principal office
Answer: B
Rationale: The Michigan Uniform Securities Act and accompanying
administrative rules require investment advisers to maintain books and
records for a minimum of 5 years, and records for the most recent 2 years
must be kept in an easily accessible location. This aligns with common
state recordkeeping requirements for advisers.
4. An investment adviser representative renews registration in Michigan by:
A. Retaking the Series 65 examination every year
B. Paying the renewal fee through the FINRA CRD system by December 31
each year
C. Filing a new Form ADV Part 2B annually with the Administrator
D. Attending a continuing education seminar approved by NASAA
Answer: B
Rationale: IAR registration renewal in Michigan is accomplished by paying
the required renewal fee through the CRD system prior to the expiration
date, generally December 31. No re-examination is required annually.
While a Form ADV Part 2B is required for initial registration, annual
renewal is fee-based through CRD.
,5. Which of the following would NOT be considered an investment adviser
under Michigan law?
A. A bank that provides investment advice as part of its trust services
B. A person who provides advice about securities for a fee solely on an
Internet website
C. A financial planner who charges an hourly fee for comprehensive plans
that include securities recommendations
D. A publisher of a newsletter providing impersonal investment advice
based on a subscriber’s individual situation
Answer: A
Rationale: Banks acting in a fiduciary capacity as a trustee and providing
advice incidental to trust services are excluded from the definition of
investment adviser under the Michigan Uniform Securities Act. Financial
planners charging fees for advice, Internet advisers, and publishers giving
personalized advice may be required to register.
6. A federal covered adviser with a place of business in Michigan must:
A. Register as an investment adviser with the Michigan Administrator
B. Submit a notice filing and consent to service of process with the state
C. Obtain a waiver of registration from the SEC
D. File quarterly reports of all clients located in Michigan
Answer: B
Rationale: Federal covered advisers, those registered with the SEC, are
generally exempt from state registration but must notice file with the
state if they have a place of business in Michigan. The notice filing
includes a consent to service of process and a fee, keeping the
Administrator informed of their activities.
7. Under Michigan law, an out-of-state investment adviser with no place of
business in Michigan is exempt from registration if it has had no more than
how many Michigan clients during the preceding 12 months?
A. 3
B. 5
C. 10
, D. 15
Answer: B
Rationale: The de minimis exemption in the Michigan Uniform Securities
Act allows an investment adviser with no place of business in the state to
avoid registration if the adviser has had no more than 5 Michigan clients
during the most recent 12-month period. This is a standard provision in
many state securities laws.
8. Which of the following activities by an investment adviser representative
would constitute an unethical business practice under Michigan
regulations?
A. Recommending a security that later declines in value despite thorough
due diligence
B. Borrowing money from a client who is a family member and not a
brokerage customer
C. Placing a trade for a client after receiving verbal authorization in
compliance with the client’s objectives
D. Charging a performance-based fee to a client with a net worth exceeding
$2.1 million
Answer: B
Rationale: Borrowing money from a client is generally considered an
unethical business practice unless the client is a financial institution in the
business of lending, the borrower is an affiliate, or other limited
exceptions apply. The family relationship does not automatically remove
the prohibition under Michigan law if the client is an advisory client.
9. Michigan requires an investment adviser’s advertisement to be:
A. Filed with and approved by the Administrator at least 10 days before first
use
B. Retained in a file with all copies and supporting data for at least 5 years
C. Submitted to FINRA for pre-review prior to distribution
D. Published in a newspaper of general circulation in each county where the
adviser has clients
Answer: B
Representative Exam Questions And
Correct Answers (Verified Answers) Plus
Rationales 2026 Q&A | Instant
Download Pdf
1. Under the Michigan Uniform Securities Act, which of the following persons
is required to register as an investment adviser representative?
A. An individual who performs only clerical duties for a state-registered
investment adviser
B. A solicitor who receives compensation for referring clients to a state-
registered investment adviser
C. An attorney who provides investment advice solely incidental to the
practice of law
D. A certified public accountant who does not receive a separate fee for
investment advice
Answer: B
Rationale: A solicitor compensated for client referrals must register as an
investment adviser representative under Michigan law. Clerical employees
and professionals such as attorneys or CPAs providing advice incidental to
their practice without separate compensation are exempt from
registration. The key element is that the person must be in the business of
providing investment advice or receiving transaction-based compensation
for referrals.
2. A state-registered investment adviser with custody of client funds must
maintain a minimum net worth of:
A. $10,000
B. $25,000
, C. $35,000
D. $50,000
Answer: C
Rationale: Under Michigan’s rules, an investment adviser that has custody
of client funds or securities is required to maintain a minimum net worth
of $35,000. An adviser without custody generally must maintain $10,000.
The higher net worth requirement reflects the increased responsibility and
risk associated with holding client assets.
3. According to Michigan’s recordkeeping rules for investment advisers,
records must be preserved for at least:
A. 3 years, with the most recent 1 year in an easily accessible place
B. 5 years, with the most recent 2 years in an easily accessible place
C. 6 years, with the most recent 3 years in an easily accessible place
D. 7 years, with all records kept in the principal office
Answer: B
Rationale: The Michigan Uniform Securities Act and accompanying
administrative rules require investment advisers to maintain books and
records for a minimum of 5 years, and records for the most recent 2 years
must be kept in an easily accessible location. This aligns with common
state recordkeeping requirements for advisers.
4. An investment adviser representative renews registration in Michigan by:
A. Retaking the Series 65 examination every year
B. Paying the renewal fee through the FINRA CRD system by December 31
each year
C. Filing a new Form ADV Part 2B annually with the Administrator
D. Attending a continuing education seminar approved by NASAA
Answer: B
Rationale: IAR registration renewal in Michigan is accomplished by paying
the required renewal fee through the CRD system prior to the expiration
date, generally December 31. No re-examination is required annually.
While a Form ADV Part 2B is required for initial registration, annual
renewal is fee-based through CRD.
,5. Which of the following would NOT be considered an investment adviser
under Michigan law?
A. A bank that provides investment advice as part of its trust services
B. A person who provides advice about securities for a fee solely on an
Internet website
C. A financial planner who charges an hourly fee for comprehensive plans
that include securities recommendations
D. A publisher of a newsletter providing impersonal investment advice
based on a subscriber’s individual situation
Answer: A
Rationale: Banks acting in a fiduciary capacity as a trustee and providing
advice incidental to trust services are excluded from the definition of
investment adviser under the Michigan Uniform Securities Act. Financial
planners charging fees for advice, Internet advisers, and publishers giving
personalized advice may be required to register.
6. A federal covered adviser with a place of business in Michigan must:
A. Register as an investment adviser with the Michigan Administrator
B. Submit a notice filing and consent to service of process with the state
C. Obtain a waiver of registration from the SEC
D. File quarterly reports of all clients located in Michigan
Answer: B
Rationale: Federal covered advisers, those registered with the SEC, are
generally exempt from state registration but must notice file with the
state if they have a place of business in Michigan. The notice filing
includes a consent to service of process and a fee, keeping the
Administrator informed of their activities.
7. Under Michigan law, an out-of-state investment adviser with no place of
business in Michigan is exempt from registration if it has had no more than
how many Michigan clients during the preceding 12 months?
A. 3
B. 5
C. 10
, D. 15
Answer: B
Rationale: The de minimis exemption in the Michigan Uniform Securities
Act allows an investment adviser with no place of business in the state to
avoid registration if the adviser has had no more than 5 Michigan clients
during the most recent 12-month period. This is a standard provision in
many state securities laws.
8. Which of the following activities by an investment adviser representative
would constitute an unethical business practice under Michigan
regulations?
A. Recommending a security that later declines in value despite thorough
due diligence
B. Borrowing money from a client who is a family member and not a
brokerage customer
C. Placing a trade for a client after receiving verbal authorization in
compliance with the client’s objectives
D. Charging a performance-based fee to a client with a net worth exceeding
$2.1 million
Answer: B
Rationale: Borrowing money from a client is generally considered an
unethical business practice unless the client is a financial institution in the
business of lending, the borrower is an affiliate, or other limited
exceptions apply. The family relationship does not automatically remove
the prohibition under Michigan law if the client is an advisory client.
9. Michigan requires an investment adviser’s advertisement to be:
A. Filed with and approved by the Administrator at least 10 days before first
use
B. Retained in a file with all copies and supporting data for at least 5 years
C. Submitted to FINRA for pre-review prior to distribution
D. Published in a newspaper of general circulation in each county where the
adviser has clients
Answer: B
