Business PracticesCâu 77 / 100
An agent regularly advises clients to redeem shares of one mutual fund family and buy a similar fund in another family, generating a new front-end sales charge each time. Absent a documented benefit to the client, this is:
a.Proper diversification across fund sponsors
b.Acceptable because each fund is individually suitable
c.Acceptable because the client signs each order ticket
d.Improper mutual fund switching, because inducing exchanges between fund families without reasonable grounds imposes needless sales charges
Giải thích
Recommending that a client move between fund families without reasonable grounds is an unethical practice, since the new sales charge is a real cost with no corresponding benefit when comparable objectives are available within the existing family. Suitability of each individual fund does not justify the repeated charges. Signed order tickets document the trade but do not supply the required reasonable basis.
Trích dẫn luật: NASAA Model RuleLuyện miễn phí toàn bộ 100 câu hỏi — không cần đăng ký.
Câu hỏi liên quan cùng chủ đề
- An agent realizes a new account form is missing a signature, so he signs the customer's name himself, reasoning that the customer had already agreed by telephone. This conduct is:
- An agent urges a client to buy a mutual fund now because 'the fund pays a big distribution next week and you'll pick up extra income.' This sales tactic is:
- A client intends to invest $48,000 in a mutual fund whose sales charge drops at a $50,000 breakpoint. The agent processes the order at $48,000 without mentioning the breakpoint. This is:
- A customer emails an agent complaining that a trade was never authorized. The agent should:
- A state-registered investment adviser takes custody of client securities. Under the NASAA custody rule, the adviser generally must:
- An investment adviser wants to charge a fee based on a share of the capital gains in a client's account. Under NASAA rules, such a performance-based fee is:
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