Types of Accounts Offered by a Broker-Dealer

What this video covers

• Why a cash account requires the customer to pay in full and how it serves as the default for mutual fund and variable annuity purchases
• What an advisory (fee-based) account really means, and why a Series 6 representative cannot charge advisory fees without an Investment Adviser Representative (IAR) registration
• How a wrap fee program bundles advice, brokerage, custody, and administrative services into a single fee, and why it is disclosed on Form ADV Part 2A Appendix 1
• What a prime brokerage account does conceptually, and why the mechanics are outside Series 6 scope
• The complete permitted product list for a Series 6 representative: mutual funds, variable annuities, variable life insurance, unit investment trusts (UITs), closed-end fund IPO shares, and municipal fund securities (529 plans, local government investment pools (LGIPs), and achieving a better life experience (ABLE) accounts)
• Why individual stocks, individual bonds, options, direct participation programs (DPPs), real estate investment trusts (REITs), and hedge funds are strictly forbidden
• How the dual-registrant trap works, and why the firm being dual-registered as a broker-dealer (BD) and investment adviser (IA) does NOT let a Series 6 representative charge advisory fees without personal IAR registration