NASAA Series 65

Under the Investment Advisers Act of 1940, an investment adviser owes clients which standard of care?

1. AA mere suitability standard with no loyalty obligation
2. BA fiduciary duty to act in the client's best interest正确
3. CA duty of care only, with no duty of loyalty
4. DA disclosure-only duty, with its own interests first

为什么: Under federal law an investment adviser is a fiduciary, and the fiduciary duty under the Advisers Act comprises a duty of care and a duty of loyalty: the adviser must act in the client's best interest and not place its own interests ahead of the client's. The duty cannot be waived, although its application may be shaped by agreement. A suitability-only standard has no loyalty obligation, a care-only duty omits loyalty, and disclosing a conflict does not by itself let the adviser put its own interests first.Investment Advisers Act of 1940 s.206; SEC Release IA-5248 (2019)

Under current federal rules, long-term capital gains (on assets held more than one year) are generally taxed:

1. AAt a higher rate than ordinary income, because the 3.8% net investment income tax applies only to long-term gains
2. BAt a flat 28% rate, the same rate that applies to gains on collectibles such as art and coins
3. CAt preferential rates lower than ordinary income rates正确
4. DNot at all for any taxpayer, as long as the shares are held in a taxable account for more than one year

为什么: Long-term capital gains on assets held more than one year are taxed at preferential rates (generally 0%, 15% or 20%) that are lower than ordinary income tax rates; Internal Revenue Code Section 1(h) caps the tax on net capital gain. Short-term gains, on assets held one year or less, are taxed as ordinary income. The 3.8% net investment income tax applies to both short- and long-term investment income for higher earners and does not raise the long-term rate above the ordinary rate. The 28% rate applies to collectibles gains, not securities, and long-term gains are not tax-free for every taxpayer.26 U.S.C. 1(h)