Compensation

What this video covers

• Why asset-based fees, hourly fees, fixed fees, commissions, and wrap fees each create different conflicts of interest, and why written pre-advice disclosure is mandatory for every arrangement
• How the qualified-client test gates performance-based fees, and the critical distinction between the $1.4 million assets-under-management test and the $2.7 million net worth test
• Why a client's primary residence is excluded from the net worth calculation, and how exam questions trap test-takers who add home equity incorrectly
• What a fulcrum fee requires: symmetrical sharing of gains and losses relative to a benchmark, and why gains-only arrangements are prohibited
• The three-step soft-dollar safe harbor test, and why research software passes while computer hardware fails
• How pay-to-play rules impose a two-year compensation ban for improper political contributions, and the dollar-amount differences between SEC adviser de minimis limits ($350 voteable, $150 non-voteable) and MSRB municipal-securities-dealer limits ($250 voteable only)
• Why memorizing dollar thresholds without understanding the underlying fiduciary conflict leaves you vulnerable to twist questions on test day