Question 1

What are the primary performance fee requirements for investment advisers?

Accepted Answer

Performance fees are strictly limited to qualified clients, specifically those with at least $1.1 million invested with the adviser or a net worth exceeding $2.2 million.

Question 2

What defines 'selling away' in the context of investment professionals?

Accepted Answer

Selling away refers to performing securities transactions outside of one's employing firm. This is generally prohibited unless the professional provides written disclosure and obtains approval from their firm.

Question 3

How does a Transfer on Death (TOD) account function?

Accepted Answer

A TOD account allows assets to transfer directly to listed beneficiaries upon the account owner's death, thereby avoiding the probate process.

Question 4

What are the primary components of the ABC rule for investment advisers?

Accepted Answer

The ABC rule defines an investment adviser as one who provides Advice about securities, is in the Business of providing advice, and receives Compensation for these services.