Virginia Investment Adviser
Representative Exam Practice Questions
And Correct Answers (Verified Answers)
Plus Rationale 2026 Q&A| Instant
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1. Which of the following best describes the primary purpose of the
Investment Advisers Act of 1940?
A. To regulate stock exchanges and trading venues
B. To govern insurance products and annuities
C. To regulate investment advisers and their fiduciary responsibilities
D. To regulate banking institutions and credit unions
C
The Investment Advisers Act of 1940 establishes federal regulation of
investment advisers and imposes fiduciary duties requiring them to
act in the best interests of their clients.
2. Under the fiduciary standard, an investment adviser must primarily act
in the best interest of the:
A. Broker-dealer
B. Client
C. SEC
D. Custodian
, B
A fiduciary is legally required to prioritize the client’s interests above
their own or their firm’s interests.
3. Which of the following is NOT typically considered an investment
adviser?
A. A financial planner charging hourly fees
B. A firm providing personalized securities recommendations for
compensation
C. A publisher of a general financial newsletter distributed to the
public
D. A firm managing client investment portfolios for a fee
C
General publications of widely distributed advice are excluded from
the definition of investment adviser because they are not
personalized.
4. An investment adviser must register with the SEC if it manages at least:
A. $25 million in client assets
B. $50 million in client assets
C. $100 million in client assets
D. $150 million in client assets
D
Generally, advisers managing $100–$110 million may register with
states, while $110 million or more typically requires SEC registration;
$150 million clearly exceeds the threshold requiring SEC registration.
5. Which document discloses an adviser’s disciplinary history, services,
and fees?
A. Form U4
B. Form ADV
C. Form 10-K
, D. Form 8-K
B
Form ADV provides detailed information about an investment
adviser’s business practices, fees, conflicts of interest, and
disciplinary history.
6. A key characteristic of a fiduciary relationship is:
A. Suitability only
B. Full disclosure and loyalty
C. Execution-only responsibility
D. No obligation to disclose conflicts
B
Fiduciary duty requires both loyalty and full disclosure of conflicts of
interest to clients.
7. Which of the following actions would most likely be considered a
violation of fiduciary duty?
A. Recommending a suitable mutual fund
B. Disclosing all compensation sources
C. Failing to disclose a conflict of interest
D. Diversifying a client portfolio
C
Failing to disclose conflicts of interest violates the fiduciary
requirement of full transparency.
8. An investment adviser representative (IAR) is best defined as someone
who:
A. Issues government securities
B. Provides investment advice on behalf of an adviser
C. Operates a stock exchange
D. Clears securities transactions
B
Representative Exam Practice Questions
And Correct Answers (Verified Answers)
Plus Rationale 2026 Q&A| Instant
Download Pdf
1. Which of the following best describes the primary purpose of the
Investment Advisers Act of 1940?
A. To regulate stock exchanges and trading venues
B. To govern insurance products and annuities
C. To regulate investment advisers and their fiduciary responsibilities
D. To regulate banking institutions and credit unions
C
The Investment Advisers Act of 1940 establishes federal regulation of
investment advisers and imposes fiduciary duties requiring them to
act in the best interests of their clients.
2. Under the fiduciary standard, an investment adviser must primarily act
in the best interest of the:
A. Broker-dealer
B. Client
C. SEC
D. Custodian
, B
A fiduciary is legally required to prioritize the client’s interests above
their own or their firm’s interests.
3. Which of the following is NOT typically considered an investment
adviser?
A. A financial planner charging hourly fees
B. A firm providing personalized securities recommendations for
compensation
C. A publisher of a general financial newsletter distributed to the
public
D. A firm managing client investment portfolios for a fee
C
General publications of widely distributed advice are excluded from
the definition of investment adviser because they are not
personalized.
4. An investment adviser must register with the SEC if it manages at least:
A. $25 million in client assets
B. $50 million in client assets
C. $100 million in client assets
D. $150 million in client assets
D
Generally, advisers managing $100–$110 million may register with
states, while $110 million or more typically requires SEC registration;
$150 million clearly exceeds the threshold requiring SEC registration.
5. Which document discloses an adviser’s disciplinary history, services,
and fees?
A. Form U4
B. Form ADV
C. Form 10-K
, D. Form 8-K
B
Form ADV provides detailed information about an investment
adviser’s business practices, fees, conflicts of interest, and
disciplinary history.
6. A key characteristic of a fiduciary relationship is:
A. Suitability only
B. Full disclosure and loyalty
C. Execution-only responsibility
D. No obligation to disclose conflicts
B
Fiduciary duty requires both loyalty and full disclosure of conflicts of
interest to clients.
7. Which of the following actions would most likely be considered a
violation of fiduciary duty?
A. Recommending a suitable mutual fund
B. Disclosing all compensation sources
C. Failing to disclose a conflict of interest
D. Diversifying a client portfolio
C
Failing to disclose conflicts of interest violates the fiduciary
requirement of full transparency.
8. An investment adviser representative (IAR) is best defined as someone
who:
A. Issues government securities
B. Provides investment advice on behalf of an adviser
C. Operates a stock exchange
D. Clears securities transactions
B
