Business PracticesPregunta 67 de 100
Which statement best distinguishes the duties of an investment adviser from those of a broker-dealer effecting transactions for a customer?
a.An investment adviser is a fiduciary owing duties of loyalty and care, including full disclosure of material conflicts, while a broker-dealer's recommendations must at a minimum be suitable for the customer
b.A broker-dealer is always a fiduciary and an adviser is not
c.Neither owes any duty beyond executing orders accurately
d.An adviser owes duties only to institutional clients
Explicación
The advisory relationship rests on a fiduciary standard: the adviser must place the client's interests first, disclose material conflicts such as compensation arrangements and proprietary products, and seek best execution. A broker-dealer making recommendations must have reasonable grounds to believe they are suitable and must disclose material facts about the transaction. Both roles carry duties well beyond accurate order entry, and fiduciary status does not depend on the client being institutional.
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