Laws & RegulationsQuestion 99 of 110
Under the Investment Advisers Act of 1940, an advisory contract must generally provide that:
a.The adviser may assign the contract to another firm without notice
b.The advisory contract cannot be assigned to another party without the client's consent
c.Fees must always be performance-based
d.The client waives all rights under federal securities laws
Explanation
An investment advisory contract generally may not be assigned to another party without the client's consent, protecting the client's right to choose their adviser. If the adviser is a partnership, the contract must provide for notice to clients of any change in the membership of the partnership. Clients cannot be made to waive rights under the securities laws.
Law Reference: Investment Advisers Act of 1940Practice all 110 questions free — no signup required.
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