STUDY FOR THE SERIES 66 EXAM

  If you plan to sit for the Series 66 exam, make sure that you are familiar with the SEC's policy on    Ethical Practices and Fiduciary Responsibilities , what they are and how you can avoid violating them.  Bob Eder in his  Study for the Series 66 Exam  devotes a whole chapter to Ethical Practices and Fiduciary Responsibilities. Here is an interesting news release from the SEC describing one investment adviser's taking undisclosed monies from a movie producer as compensation for recommending investing in films of that production company. Warning: Don't take undisclosed money or compensation in return for steering your clients to specific investments! SEC Charges Hudson Valley Wealth Management Advisory Firm and  Founder for Failing to Disclose Conflicts of Interest Firm owner received undisclosed fee for investing clients’ money in films FOR IMMEDIATE RELEASE 2024-55 Washington D.C., May 14, 2024 — The Securities and Exchange Commission today announc...

Taking the Series 66 in the near future? If so, then you should know that the SEC has changed the rules governing Regular-Way Settlement from two business days to only one business day.  Regular-Way Settlement  will be T+1, not T+2. The effective date of this rule change is one week from tomorrow, or May 28, 2024. Furthermore, the rules of the Fed for payment in both cash and margin accounts now becomes three business days following trade date, or T+3. The former Fed rule was T+4. Make sure that you know these new rules. Here is the link to NASAA's Test Specifications   for the Series 66 Exam . See Section III (J) (1) covering Regular-Way Settlement. Bob Eder discusses  Regular-Way Settlement in his  Study for the Series 66 Exam . Study for the Series 66 Exam  i s available from Amazon in both paperback and Kindle e-book versions.  Here is the link to Bob Eder's Series 66 book on Amazon .   For questions about Bob Eder...

Here's an interesting release from the SEC on penalizing five investment advisory firms for violations of the Marketing Rule. All five investment advisers published hypotheticals on their websites " without adopting and implementing policies and procedures reasonably designed to ensure that the hypothetical performance was relevant to the likely financial situation and investment objectives of each advertisements intended audience, as required by the Marketing Rule. "  One advisory firm was also penalized for " including false and misleading statements in advertisements, advertising misleading model performance, being unable to substantiate performance shown in its advertisements, and failing to enter into written agreements with people it compensated for endorsements. " FOR IMMEDIATE RELEASE 2024-46 Washington D.C., April 12, 2024 — The Securities and Exchange Commission today announced settled charges against five registered investment advisers for Marketing R...

Did you know that the SEC requires that an investment adviser must provide a "Brochure Supplement" to every client who receives  advisory information and advisory services from  one of the adviser's supervised employees? This requirement is found in Part 2B of Form ADV.  The investment adviser or advisory firm must provide a Brochure Supplement for each supervised individual (1) who develops or formulates investment advice for a client   and   who has direct contact with that client; or (2) who makes investment decisions for that client on a discretionary basis,   even if   this employee has no direct contact with the client. Here's how the SEC describes the Brochure Supplement, which is actually Part 2B of Form ADV: The brochure supplements contain information about the educational background, business experience, and any disciplinary history of the specific individuals who provide advisory services to the client. Brochure supplements may be separate ...

Under the  SEC's Marketing Rule , 17 CFR 275.206(4)-1, an investment adviser may not make any statements or promises that in general are false or misleading, or which cannot be substantiated by the adviser. Here are some general prohibitions which the Marketing Rule prohibits:   statements that are false and misleading or untrue   statements that the adviser cannot substantiate as to the statements'   truthfulness  statements that may cause wrong implications or inferences in a material fashion  statements that fail to include material risks or drawbacks  misleading assertions or give investment advice that is unfair or unbalanced  charts or tables showing investment results that are misleading or unfair The SEC has recently cited two investment advisory firms that have made unfair and misleading claims about using A.I. in the firms' selection of investments and advisory services.   Here is what the SEC said: "According to the SEC’s...

Taking the Series 66 Exam? If yes, make sure that you are able to work problems regarding the Time Value of money, such as the net present value (NPV) and future value (FV). How do I know this? I know this because NASAA publishes Test Specifications for the Series 66 Exam , and Section I (A) (1) (1.1 - 1.3) specifically discusses concepts regarding  Time Value of Money . Bob Eder discusses discusses these concepts in his Study for the Series 66 Exam . Here is a sample problem involving NPV: James is considering purchasing a business office building. He thinks that he could sell the building for  $1 million at the end of five years. Assume interest rates will hold steady at six percent for this period and interest is paid on a yearly basis. What is the net present value (NPV) of the $1,000,000 sales proceeds? To solve for NPV of $1 million, here is the formula: NPV = Future Amount/(1.06)^5 NPV 1,000,000/1.338 NPV= $747,258 Here is the link to NASAA's Test Specifications ...