Finra Exam Series-6 Topic 5 Question 100 Discussion

Actual exam question for Finra's Series-6 exam

Question #: 100
Topic #: 5

Which of the following would not have to register as an investment adviser or an investment adviser representative under the Investment Advisers Act of 1940?

i. an insurance agent who sells only whole life and term life policies

ii. a commodity futures broker

iii. a bank employee who sells the bank's customers only CDs and other bank securities that are FDIC-insured

IV. a person that is registered as a broker-dealer with the SEC that also provides investment advice to its customers for additional compensation

AI and III only

BI, II, and III only

CII and III only

DI, II, III, and IV

Show Suggested Answer

Suggested Answer: B

Only the persons described in Selections I, II, and III would not have to register as an investment adviser or an investment adviser representative under the Investment Advisers Act of 1940. Whole life and term life policies, commodity futures, and FDIC-insured bank products are excluded from the definition of a security, and those persons selling these products need not register. Therefore, the insurance agent, the commodity futures broker, and the bank employee who sells only FDIC-insured bank securities need not register. Even if a person is registered as a broker-dealer with the SEC, if that entity also provides investment advice to its customers for additional compensation, it must register as an investment adviser.

by Tegan at Apr 07, 2025, 10:17 PM

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Charlena

27 days ago

Option B, all the way! I mean, come on, an insurance agent selling life policies? That's about as far from investment advice as you can get. And a bank employee selling FDIC-insured products? That's just common sense.

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Delmy

1 months ago

Hmm, this is a tough one. I'm going to have to go with option D, just to be on the safe side. Better to cover all my bases, you know? After all, you can never be too careful when it comes to these financial regulations.

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Ming

5 days ago

User 2: I agree, it's better to cover all the possibilities.

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Elvis

9 days ago

User 1: I think option D is the safest choice.

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Annita

1 months ago

I'm going to have to go with option C on this one. The insurance agent and bank employee are clearly exempt, and a commodity futures broker is not an investment adviser, so that leaves II and III as the correct answer.

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Rosendo

2 months ago

I'm going with option B as well. The way I see it, the only one who would need to register is the broker-dealer who provides investment advice for additional compensation. The rest are just doing their regular jobs.

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Matthew

18 hours ago

That makes sense. It's important to know the different roles and responsibilities under the Investment Advisers Act to ensure compliance.

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Carlene

3 days ago

Yeah, I think you're right. The broker-dealer is the only one who would need to register because they are providing investment advice for additional compensation.

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Janna

10 days ago

I agree, option B seems to be the correct choice. The insurance agent and bank employee are not providing investment advice, and the commodity futures broker is not covered under the Investment Advisers Act.

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Sage

2 months ago

Option B seems like the obvious choice here. I mean, insurance agents and bank employees clearly don't need to register as investment advisers, right? And a commodity futures broker? Come on, that's a no-brainer.

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Lavonda

14 days ago

Definitely, option B covers all the individuals who do not have to register under the Investment Advisers Act of 1940.

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Sabine

1 months ago

It's clear that option B is the best choice here. None of those individuals need to register as investment advisers.

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Sherron

1 months ago

Commodity futures brokers are also exempt, so it makes sense that option B includes all of them.

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Pa

2 months ago

I agree, option B is the correct choice. Insurance agents and bank employees are exempt from registration.

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Evan

2 months ago

I'm not sure about that. I think the answer might be C) II and III only because commodity futures brokers are also exempt.

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Gracia

2 months ago

I agree with Mozell. Insurance agents and bank employees selling only certain products are exempt from registration.

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Mozell

3 months ago

I think the answer is A) I and III only.

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