Uniform Securities Agent State Law (Series 63) Practice Exam

Who is considered an 'investment advisor representative'?

1. A broker making trades for clients

2. A person employed by an advisor who gives investment advice

3. An investor managing their own portfolio directly

4. A regulatory official overseeing investment advisors

The correct answer is: A person employed by an advisor who gives investment advice

The term "investment advisor representative" specifically refers to an individual who is employed by or associated with an investment advisor and is involved in providing investment advice to clients. This role is critical in the investment advisory industry, as these representatives are responsible for guiding clients in making informed investment decisions based on their objectives and financial situations. They typically possess specialized knowledge and training, allowing them to effectively assess client needs and recommend suitable investment strategies. Individuals in this role must also comply with regulatory requirements, including registration and specific fiduciary duties to act in the best interest of their clients. This distinguishes them from other positions that may involve financial transactions or oversight without the direct responsibility of giving personalized investment advice. By contrast, other options pertain to different roles within the financial industry. For instance, a broker who makes trades for clients primarily facilitates transactions and may not provide personalized investment advice or guidance. An investor managing their own portfolio is acting independently and does not fall under the regulatory definition of an investment advisor representative. Similarly, a regulatory official overseeing investment advisors has a supervisory function, differing fundamentally from the client-focused role of an investment advisor representative.