Series 63 Investment Adviser Representatives Practice Questions
Investment Adviser Representatives makes up 3 of every 60 questions on a Tigertest Series 63 practice test. Here are 10 of the 10 questions on it, each with the answer and the reason.
Updated by the Tigertest team. Based on NASAA's Series 63 test specifications. Original questions; 60 per test in the real exam's proportions, 43 of 60 to pass. Not affiliated with NASAA or FINRA.
1. Which employee of a state-registered adviser is an investment adviser representative?
- A.An outside auditor of the firm
- B.One who manages client portfolios
- C.One who only books client meetings
- D.One who files client paperwork
Answer: B. An IAR makes recommendations, manages accounts, solicits or sells advisory services, or supervises those who do. Clerical and administrative staff are excluded, and an outside auditor is not employed by the adviser to give advice.
2. Under SEC Rule 203A-3, which location counts as an IAR's place of business?
- A.Any state where a client lives
- B.The SEC's regional office
- C.Only her firm's head office
- D.An office where she sees clients
Answer: D. A place of business is any location held out to the public where the IAR regularly provides advisory services, solicits, meets with or communicates with clients. States may register an IAR of a federal covered adviser only where she has one.
3. Under NASAA's model rule on IAR registration, which qualification satisfies the competency requirement?
- A.Passing the Series 65
- B.The SIE on its own
- C.The Series 63 on its own
- D.The Series 7 on its own
Answer: A. Model Rule 202(a)-2 accepts the Series 65, or the Series 66 together with the Series 7, or certain designations such as the CFP or CFA. The Series 63 alone qualifies an agent, not an IAR.
4. An adviser's employee supervises the staff who give investment advice but gives none herself. Under the USA she is:
- A.A clerical employee
- B.A broker-dealer agent
- C.An IAR
- D.Exempt as a manager
Answer: C. The IAR definition includes anyone who supervises employees who make recommendations, manage accounts or sell advisory services, not only those who give advice themselves.
5. A registered agent of a broker-dealer starts charging clients a separate fee for written financial plans. She:
- A.Registers only past 15 clients
- B.Needs nothing if plans are written
- C.Must also register as an IAR
- D.Is covered by agent registration
Answer: C. A broker-dealer agent is excluded from the adviser definition only when advice is solely incidental and there is no special compensation. A separate fee for advice makes her an IAR who must register.
6. When an IAR of a state-registered adviser leaves the firm, who must promptly notify the Administrator?
- A.The investment adviser
- B.The adviser's clients
- C.The SEC
- D.The departing IAR alone
Answer: A. For an adviser registered with the state, the adviser reports the start or end of an IAR's association. For an IAR of a federal covered adviser, the IAR herself notifies the state.
7. Under NASAA's IAR model rule, which professional designation can satisfy the competency requirement?
- A.Registered Paraplanner (RP)
- B.Certified Public Accountant (CPA)
- C.Chartered Life Underwriter (CLU)
- D.Certified Financial Planner (CFP)
Answer: D. Model Rule 202(a)-2 accepts the CFP, ChFC, PFS, CFA and CIC designations in place of the Series 65. A CPA qualifies through the PFS credential, not the CPA license alone.
8. Without the client's consent, an IAR tells a prospect that a well-known local doctor is one of her clients. Under NASAA's rule this is:
- A.Required in marketing
- B.An unethical disclosure
- C.Allowed as a referral
- D.Allowed because it is true
Answer: B. NASAA's unethical practices rule bars disclosing a client's identity, affairs or investments unless the client consents or the law requires it.
9. An IAR's state registration is effective only while the individual:
- A.Has a branch office in the state
- B.Is associated with an adviser
- C.Holds a professional designation
- D.Keeps a personal surety bond
Answer: B. IAR registration depends on association with a registered or federal covered adviser. When the association ends, the individual may not act as an IAR until associated again.
10. Under NASAA's model rule on unethical practices, which is unethical for an IAR?
- A.Offering a free first meeting
- B.Explaining risks in writing
- C.Billing a fee disclosed in Form ADV
- D.Charging an unreasonable fee
Answer: D. Charging a client an unreasonable advisory fee is listed as unethical even when the fee is disclosed. Disclosed fees, free consultations and written risk explanations are proper.
Practice all 10 investment adviser representatives questions, and the rest of the 200-question bank, in the free Series 63 training sets. Questions you miss come back until you have mastered them.
Start practicingFree to start. No account needed.