Laws & RegulationsQuestion 108 of 110
State rules addressing an adviser that maintains custody or discretion over client accounts commonly require the adviser to do which of the following?
a.Ignore any minimum financial requirements
b.Meet minimum net worth or bonding requirements set by the Administrator, or provide required notice
c.Guarantee client accounts against loss
d.Avoid providing account statements to clients
Explanation
State rules often impose minimum net worth or surety bond requirements on advisers that have custody of or discretion over client assets, scaled to the level of authority they hold. These financial safeguards help protect clients if the adviser fails or misuses assets. Advisers must also meet applicable notice, disclosure, and statement-delivery obligations.
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