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Finra Exam Series-6 Topic 6 Question 67 Discussion
Topic #: 6
NewWave Investments, a family of mutual funds, hires the star of a new motion picture about the workings of Wall Street to provide a testimonial as part of NewWave's new television ad campaign. The actor's financial adviser has, in fact, invested some of the actor's monies in NewWave's funds. NewWave provides the actor with a script in which the actor explains the concept of dollar cost averaging to the viewers. At the conclusion of the actor's explanation, the viewers are informed that the actor has been paid for his testimonial, that his experience may not be representative of that of other clients, and that past performance is no guarantee of future performance. Based on these facts:
The false statement regarding both a UGMA and a UTMA is that the assets must be re-registered in the minor child's name when the child turns 18. The rule differs between the two types of accounts. The UGMA requires that the assets must be re-registered when the child reaches the ''age of majority,'' as defined by the state, and the definition differs among states. Under the UTMA, the transfer of the account can be delayed until the minor child has reached the age of 25.
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