What is Investment Adviser Representative (IAR)?

B is correct. Investment Adviser Representatives (IARs) register with state securities regulators, never with the SEC, whether their firm is SEC-registered or state-registered. For an SEC-registered firm, a state may require registration only of IARs who have a place of business in that state (Investment Advisers Act Section 203A(b)(1)(A)).

A is incorrect because the firm's SEC registration status does not change where IARs register. Only the firm (IA) registers with the SEC. C is incorrect because IARs never have dual registration with both SEC and states; only states regulate IARs. D is incorrect because IARs must register even when working for SEC-registered firms; the individual and the firm have separate registration requirements.

C is correct. The Series 65 exam alone qualifies an individual for IAR registration. Alternatively, passing both the Series 7 (General Securities Representative) and Series 66 (Uniform Combined State Law), together with the Securities Industry Essentials (SIE) exam, also qualifies for IAR registration.

A (Series 6 only) qualifies individuals to sell mutual funds and variable products but does not qualify for IAR registration. B (Series 7 only) qualifies for broker-dealer representative roles but requires the Series 66 to also serve as an IAR. D (Series 63 with Series 6 and Series 7) provides state law knowledge and representative qualifications but does not meet IAR requirements, because the Series 63 is not the Series 66.

B is correct. Two individuals require IAR registration: Mark (who makes investment recommendations) and David (who supervises IARs and provides advice to clients). IAR registration is required for individuals who provide investment advice, make recommendations, or supervise those who do.

A is incorrect because it excludes David, who supervises IARs and meets with institutional clients, and both activities make him an IAR. C is incorrect because Susan performs purely clerical duties (answering phones, scheduling), which do not require IAR registration. D is incorrect because Lisa's role is purely administrative (paperwork, file maintenance) and does not involve providing investment advice or supervision.

B is correct (the exception). IARs do not register with the SEC regardless of their firm's assets under management. IARs register only with state securities regulators, even if the investment adviser firm itself is SEC-registered.

A is accurate: IARs owe fiduciary duty to clients, requiring them to act in the client's best interest at all times. C is accurate: IARs are defined as individuals who provide investment advice or manage accounts on behalf of an RIA. D is accurate: as fiduciaries, IARs must fully disclose all material conflicts of interest, including compensation arrangements that could influence their recommendations.

B is correct. Statements 1, 2, and 4 are accurate.

Statement 1 is true: As an individual providing investment advice on behalf of an investment adviser, Michael must register as an IAR with the state securities regulator where he conducts business.

Statement 2 is true: IARs owe fiduciary duty to clients under the Investment Advisers Act of 1940, requiring them to act in the client's best interest and disclose all material conflicts.

Statement 3 is false: IARs never register with the SEC, regardless of the firm's size or registration status. Only the investment adviser firm (not individual IARs) may register with the SEC.

Statement 4 is true: A key distinction between IARs and broker-dealer representatives is that IARs are held to a fiduciary standard at all times, while broker-dealer representatives traditionally operate under a suitability standard (though Regulation Best Interest has narrowed this gap).