Finra Series-6 Exam - 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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Jannette

5 months ago

I thought all financial advisors had to register, this is surprising!

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Ashlyn

5 months ago

Wait, why wouldn’t the broker-dealer need to register?

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Venita

6 months ago

Totally agree, I and III are safe!

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Aaron

6 months ago

Seems odd that a bank employee is off the hook.

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Rosio

6 months ago

I think I and III don’t need to register.

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Sharika

6 months ago

I believe options I and III are correct, but I’m not entirely confident about the bank employee's situation.

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Jina

7 months ago

I’m a bit confused about the commodity futures broker. I feel like they might have different rules compared to investment advisers.

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Theresia

7 months ago

I practiced a similar question where a broker-dealer was involved, and I think they do have to register if they give advice for extra fees.

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Golda

7 months ago

I think I remember that insurance agents selling only life policies don't need to register, but I'm not sure about the bank employee.

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Valentin

7 months ago

I've got a good feeling about this one. The insurance agent and the bank employee seem like they would be exempt since they're not providing investment advice for a fee. But I'll double-check the specifics just to be sure.

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Brice

7 months ago

I'm a little confused on the difference between a broker-dealer and an investment adviser. I'll need to make sure I understand that distinction before I can answer this question confidently.

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Sylvia

8 months ago

Okay, let's see. I think the key here is to identify which of these individuals or entities are providing investment advice for compensation. That's the key trigger for the registration requirement.

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Glendora

8 months ago

Hmm, this looks like a tricky one. I'll need to carefully review the details of the Investment Advisers Act to determine which of these scenarios would not require registration.

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Charlena

1 year 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 year 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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Paulina

11 months ago

User 4: Option D it is then, better safe than sorry.

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Elliott

11 months ago

User 3: Yeah, you never know with these regulations.

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Ming

11 months ago

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

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Elvis

12 months ago

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

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Annita

1 year 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

1 year 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

11 months 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

11 months 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

12 months 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

1 year 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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