Series 65 – Uniform Investment Adviser
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Correct Answers (Verified Answers) Plus
Rationales 2026 Q&A |Instant
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1. An investment adviser is defined as a person who:
A. Gives advice on insurance products only
B. Provides advice about securities for compensation
C. Sells real estate for commissions
D. Works for a bank in a clerical role
Answer: B
Rationale: An investment adviser is anyone who provides advice about securities
for compensation.
2. Which of the following is NOT considered “compensation” under the
Investment Advisers Act?
A. Advisory fees
B. Commissions
C. Salary
D. Personal gifts from family
Answer: D
Rationale: Personal gifts from family are not connected to providing investment
advice and are not considered compensation.
3. A person who manages client portfolios on a discretionary basis is acting as
a:
A. Broker-dealer
, B. Custodian
C. Investment adviser
D. Transfer agent
Answer: C
Rationale: Discretionary portfolio management is an advisory function.
4. Which of the following must register with the state, not the SEC?
A. Advisers with more than $110 million AUM
B. Federal covered advisers
C. Advisers with less than $100 million AUM
D. Investment companies
Answer: C
Rationale: Advisers with AUM under $100 million typically register at the state
level.
5. Which of the following is exempt from the definition of investment adviser?
A. Bank
B. Broker-dealer
C. Insurance agent
D. Financial planner
Answer: A
Rationale: Banks are excluded from the definition of investment adviser under
federal and state laws.
6. Form ADV is used to:
A. Advertise advisory services
B. Register as an investment adviser
C. Execute client trades
D. File tax returns
Answer: B
Rationale: Form ADV is the registration document for investment advisers.
, 7. Which part of Form ADV must be given to clients?
A. Part 1 only
B. Part 2 only
C. Schedule D
D. Part 3 only
Answer: B
Rationale: Part 2 is the brochure that must be delivered to clients.
8. An IA’s fiduciary duty requires the adviser to:
A. Guarantee returns
B. Put client interest first
C. Follow only written instructions
D. Avoid all risk
Answer: B
Rationale: Fiduciary duty requires acting in the client’s best interests.
9. “Churning” refers to:
A. Failure to diversify
B. Excessive trading to generate commissions
C. Late fee disclosure
D. Market timing
Answer: B
Rationale: Churning is excessive trading for the purpose of increasing
commissions.
10.Which of the following is prohibited?
A. Fee-based advisory contracts
B. Performance-based fees for retail clients
C. Delivery of Part 2 brochure
D. Written client agreements
Answer: B
Rationale: Performance-based fees are prohibited for most retail (non-qualified)
clients.
Law Exam Practice Exam Question And
Correct Answers (Verified Answers) Plus
Rationales 2026 Q&A |Instant
Download Pdf
1. An investment adviser is defined as a person who:
A. Gives advice on insurance products only
B. Provides advice about securities for compensation
C. Sells real estate for commissions
D. Works for a bank in a clerical role
Answer: B
Rationale: An investment adviser is anyone who provides advice about securities
for compensation.
2. Which of the following is NOT considered “compensation” under the
Investment Advisers Act?
A. Advisory fees
B. Commissions
C. Salary
D. Personal gifts from family
Answer: D
Rationale: Personal gifts from family are not connected to providing investment
advice and are not considered compensation.
3. A person who manages client portfolios on a discretionary basis is acting as
a:
A. Broker-dealer
, B. Custodian
C. Investment adviser
D. Transfer agent
Answer: C
Rationale: Discretionary portfolio management is an advisory function.
4. Which of the following must register with the state, not the SEC?
A. Advisers with more than $110 million AUM
B. Federal covered advisers
C. Advisers with less than $100 million AUM
D. Investment companies
Answer: C
Rationale: Advisers with AUM under $100 million typically register at the state
level.
5. Which of the following is exempt from the definition of investment adviser?
A. Bank
B. Broker-dealer
C. Insurance agent
D. Financial planner
Answer: A
Rationale: Banks are excluded from the definition of investment adviser under
federal and state laws.
6. Form ADV is used to:
A. Advertise advisory services
B. Register as an investment adviser
C. Execute client trades
D. File tax returns
Answer: B
Rationale: Form ADV is the registration document for investment advisers.
, 7. Which part of Form ADV must be given to clients?
A. Part 1 only
B. Part 2 only
C. Schedule D
D. Part 3 only
Answer: B
Rationale: Part 2 is the brochure that must be delivered to clients.
8. An IA’s fiduciary duty requires the adviser to:
A. Guarantee returns
B. Put client interest first
C. Follow only written instructions
D. Avoid all risk
Answer: B
Rationale: Fiduciary duty requires acting in the client’s best interests.
9. “Churning” refers to:
A. Failure to diversify
B. Excessive trading to generate commissions
C. Late fee disclosure
D. Market timing
Answer: B
Rationale: Churning is excessive trading for the purpose of increasing
commissions.
10.Which of the following is prohibited?
A. Fee-based advisory contracts
B. Performance-based fees for retail clients
C. Delivery of Part 2 brochure
D. Written client agreements
Answer: B
Rationale: Performance-based fees are prohibited for most retail (non-qualified)
clients.
