Achilles Flashcards
To get prepaid advisory fees, IAs have to do what?
include it in the contract
if>$500, include in balance sheet
IAs can’t charge based on performance unless
individuals with 1.1m invested (worth 2.2m)
hedge funds
charge based on a % of net gains in a specific time against the benchmark
If IA pays BD for referral fees, does he have to disclose this?
yes
If IA suggests the client to use a specific BD, does conflict of interest need to be disclosed?
yes
Can IAs share profits/losses?
No, unless it’s family account
Can IAs charge both commission and advisory fee?
Yes
Can IA also be an agent?
Yes
What must IA do to get custody?
give notice to admin
provide balance sheet
send statement every 3 years
annual audit w/SEC
What does IA discretion mean?
discretion = assets, shares, buy or sell
Not included is time (must be within the day) and price
State IA brochure rules
48 hrs before, or 5 days
annual: resend only where is material change or requested
Fed IA brochure rules
before or during
annual: 120 days within the fiscal year
Can agents of the same BD share commissions?
Yes
Can agents share profits/losses in a customer account?
Yes
IRA: name the circumstances when you are withdraw early with the fees
equal distribution over life
death/disability
1st house purchase
Medical expenses
When a child is born/adopted
Qualified education expenses for immediate family (nieces/nephews don’t count)
IRA: when you die, name the 4 possibilities
Spouse:
roll over into her own (10% applies)
Continue as beneficiary (no 10% early withdrawl) … the con is early RMD if the beneficiary is much younger
QDRO: does not apply
Nonspouse
Cash out 100%: taxable income
Cash out over 10 years
