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Series 63 Investment Adviser Registration Practice Questions

Official outline
NASAA Series 63 Exam Content Outline
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8
Updated
Nov 3, 2026

  1. Question 1, medium

    An investment adviser representative changes employment from Adviser Firm A to a newly formed, unaffiliated Adviser Firm B in the same state on June 1. Which statement correctly describes her registration status on June 2?

    • A.Her registration automatically transfers to Firm B without any new filing because she remains an IAR in the same state.
    • B.Her registration with Firm A terminates upon the change, and a new application must generally be filed to register her with Firm B.
    • C.She may act as an unregistered IAR for up to 90 days while the transfer paperwork is pending.
    • D.No registration action is needed because IAR registration attaches to the individual, not the firm, under the Uniform Securities Act.
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    Correct answer: B. Her registration with Firm A terminates upon the change, and a new application must generally be filed to register her with Firm B.

    IAR registration is tied to the sponsoring firm. A change of employer terminates the existing registration, and the new employer must file a new application to register the representative before she conducts advisory business on its behalf.

    • A. Registration doesn't automatically transfer between unaffiliated firms. A new filing is generally required.
    • B. Correct. Her registration with Firm A terminates upon the change in employment, and a new application must generally be filed to register her with the new, unaffiliated Firm B.
    • C. There's no 90-day grace period allowing her to act as an unregistered IAR while paperwork is pending.
    • D. IAR registration is tied to the sponsoring firm, not solely the individual. A change in employer requires a new registration action.

  2. Question 2, easy

    An individual holds an active CFP certification and has taken neither the Series 65 nor the Series 66. She wants to register as an investment adviser representative in a state that follows NASAA's model rule. What is the correct position?

    • A.She must pass the Series 65 because professional designations are not accepted as a substitute for it.
    • B.She may qualify for a waiver of the Series 65 examination requirement based on the CFP certification.
    • C.She must pass the Series 66 in place of the Series 65, since a CFP only changes which exam is needed.
    • D.The waiver applies to the Series 63 examination but not to the Series 65.
    Show answer and explanationHide answer

    Correct answer: B. She may qualify for a waiver of the Series 65 examination requirement based on the CFP certification.

    NASAA's model rule allows the qualifying examination to be waived for individuals who hold certain designations, including the CFP certification. She can therefore seek registration without sitting for the Series 65.

    • A. Incorrect. The NASAA model rule lets the Series 65 requirement be waived for holders of certain designations, including the CFP. Designations are therefore recognized, and passing the Series 65 is not required in every case.
    • B. Correct. The CFP certification is a recognized basis for waiving the Series 65.
    • C. Incorrect. The Series 66 is a combined alternative to the Series 65 and Series 63 for candidates who have not been granted a waiver. A CFP holder who qualifies is relieved of the adviser qualifying exam requirement and is not redirected to a different exam.
    • D. The designation waiver relates to the adviser qualifying examination, not the Series 63.

  3. Question 3, medium

    A broker-dealer agent occasionally offers general portfolio commentary to clients as part of standard brokerage services, but the firm charges no separate or special fee for this commentary. Compensation is limited to standard commissions on trades executed. Under the Uniform Securities Act, does this activity, by itself, require the broker-dealer to register as an investment adviser?

    • A.Yes, because giving investment-related commentary to clients triggers adviser registration, even when the commentary is incidental to brokerage services and no separate fee is charged.
    • B.Yes, because the Act provides no exclusion from the investment adviser definition for broker-dealers, so a firm giving portfolio commentary to clients must also register as an adviser.
    • C.No, provided the firm has fewer than 5 total clients nationwide and limits its portfolio commentary to written reports rather than oral discussions with clients.
    • D.No, because broker-dealers whose investment advice is solely incidental to brokerage services and who receive no special compensation for it are excluded from the adviser definition.
    Show answer and explanationHide answer

    Correct answer: D. No, because broker-dealers whose investment advice is solely incidental to brokerage services and who receive no special compensation for it are excluded from the adviser definition.

    The Act excludes broker-dealers from the investment adviser definition when advisory services are incidental to their brokerage business and no special compensation is charged for the advice itself. Standard commission income does not count as special compensation.

    • A. Wrong. Commentary that is incidental to standard brokerage services and not separately compensated does not trigger adviser registration.
    • B. Wrong. The Act specifically provides a broker-dealer exclusion for advice that is solely incidental to brokerage and not specially compensated.
    • C. There is no client-count or written-versus-oral test in the broker-dealer's incidental-advice exclusion.
    • D. Correct. Broker-dealers whose investment advice is solely incidental to brokerage services, and who receive no special compensation for it, are excluded from the investment adviser definition.

  4. Question 4, easy

    Under the uniform de minimis exemption, an investment adviser with no place of business in a state may avoid registering in that state if, during the preceding 12 months, it has had no more than how many non-institutional clients who reside in that state?

    • A.5
    • B.3
    • C.15
    • D.There is no numerical limit as long as the adviser does not advertise in the state
    Show answer and explanationHide answer

    Correct answer: A. 5

    The uniform de minimis exemption allows an investment adviser with no place of business in the state to avoid state registration if, during the preceding 12 months, it has had no more than 5 clients who are state residents and are not institutional clients (banks, insurance companies, and similar financial institutions). Exceeding 5 non-institutional retail clients triggers the registration requirement.

    • A. Correct. The uniform de minimis exemption allows an adviser with no place of business in the state to avoid registration if it has no more than 5 non-institutional (retail) clients residing there in the preceding 12 months.
    • B. 3 is below the actual threshold used in the uniform de minimis exemption for investment advisers.
    • C. 15 overstates the actual client cap set by the uniform de minimis exemption.
    • D. There is a specific numerical limit (5 clients); the exemption isn't simply conditioned on not advertising in the state.

  5. Question 5, easy

    Which of the following individuals meets the definition of an investment adviser representative under the Uniform Securities Act?

    • A.A supervisor at an investment adviser firm who determines the general investment recommendations to be made to clients
    • B.A receptionist at the firm who schedules client meetings, answers phones, and handles incoming mail without giving advice to clients
    • C.An independent CPA engaged once a year to audit the firm's financial statements
    • D.A data-entry clerk who inputs completed trade tickets into the firm's back-office system
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    Correct answer: A. A supervisor at an investment adviser firm who determines the general investment recommendations to be made to clients

    An IAR is an individual employed by or associated with an investment adviser who makes recommendations, manages client accounts, determines recommendations to be given, solicits advisory business, or supervises those who do. Choice A fits squarely within that definition. Purely clerical, ministerial employees (B, D) and independent outside professionals engaged for unrelated services (C) do not meet the definition.

    • A. Correct. Someone who determines the general investment recommendations given to clients is exercising the advice-giving function that defines an investment adviser representative.
    • B. A receptionist who schedules meetings, answers phones, and handles mail performs clerical duties, which is excluded from the IAR definition.
    • C. An outside CPA engaged for an annual audit is providing unrelated professional services, not investment advice, and doesn't meet the IAR definition.
    • D. A data-entry clerk inputting completed trade tickets performs a purely clerical, back-office function with no advice-giving role.

  6. Question 6, hard

    ABC Advisers, LLC manages $150 million in client assets and is properly registered with the SEC as an investment adviser. A state Administrator wants ABC to register as an investment adviser in that state. Which statement is TRUE under the Uniform Securities Act?

    • A.The Administrator may require full state registration because ABC's $150 million in assets exceeds the state registration threshold, and SEC registration does not limit the state's authority to require registration
    • B.The Administrator cannot require full registration because ABC is a federal covered adviser, but the Administrator may require a notice filing, a fee, and retains authority to investigate and enforce the state's antifraud provisions against ABC
    • C.ABC is exempt from state notice filing and fee requirements once it is registered with the SEC, although the Administrator keeps authority to investigate and enforce the state's antifraud provisions against it
    • D.The Administrator may require full registration if ABC has more than five clients in the state, because that client count is the test for whether an adviser registers with the state or with the SEC, regardless of assets managed
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    Correct answer: B. The Administrator cannot require full registration because ABC is a federal covered adviser, but the Administrator may require a notice filing, a fee, and retains authority to investigate and enforce the state's antifraud provisions against ABC

    Advisers with sufficient assets under management register with the SEC as 'federal covered advisers,' and NSMIA preempts states from requiring full state registration of them. States retain the ability to require a notice filing and collect a fee, and. Critically. States never lose antifraud enforcement jurisdiction, even over federal covered advisers.

    • A. Incorrect: NSMIA makes an SEC-registered adviser a federal covered adviser, and that status preempts state registration. The state has no registration threshold that overrides it, so SEC registration does limit the state's authority to require full registration.
    • B. Correct. Notice filing/fee and antifraud jurisdiction survive federal preemption of full registration.
    • C. Incorrect: the antifraud half is accurate, but states may still require federal covered advisers to make notice filings and pay fees. Calling ABC exempt from those requirements is the error.
    • D. Incorrect: the five-client figure belongs to the de minimis exemption for advisers with no place of business in the state. It does not decide whether an adviser registers with the state or the SEC, and it cannot override the preemption that applies to a federal covered adviser.

  7. Question 7, medium

    A broker routinely receives separately negotiated asset-based fees to construct discretionary portfolios for customers. What should be assessed?

    • A.Whether the activity creates investment adviser or investment adviser representative registration obligations
    • B.Whether the broker recommends only exchange-listed securities, which would remove the activity from adviser rules
    • C.Whether the client resides in the same state as the broker's main office
    • D.Whether labeling the fee a commission removes the need for any analysis of adviser status
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    Correct answer: A. Whether the activity creates investment adviser or investment adviser representative registration obligations

    A broker paid separately negotiated asset-based fees to build discretionary portfolios is giving advice for compensation beyond incidental brokerage service. The question is whether adviser registration is required.

    • A. Special asset-based fees for discretionary portfolio construction point to advisory business needing adviser or representative registration.
    • B. The type of security recommended does not take advisory activity outside adviser registration rules.
    • C. Client residence in the broker's home state does not decide whether the activity is advisory.
    • D. Substance, not the label on the fee, determines adviser status.

  8. Question 8, hard

    Brightwater Capital manages $12 million and serves as investment adviser to a mutual fund registered under the Investment Company Act of 1940. It has an office in State K. Which statement about its registration in State K is correct?

    • A.It is exempt from both SEC and state requirements because the fund it advises is already registered.
    • B.It must register in State K, because its assets under management are below the amount needed for SEC registration, and advising a registered fund does not alter that result.
    • C.It is a federal covered adviser as an adviser to a registered investment company, so State K may require a notice filing and fee but not registration.
    • D.It must register with the SEC and with State K, because it has an office in the state.
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    Correct answer: C. It is a federal covered adviser as an adviser to a registered investment company, so State K may require a notice filing and fee but not registration.

    Advisers to investment companies registered under the 1940 Act are SEC-registered regardless of the assets they manage, so they are federal covered advisers. State K may therefore require a notice filing and fee but cannot require state registration.

    • A. The adviser is not exempt; it registers with the SEC and remains subject to notice filing.
    • B. An adviser to a registered investment company is SEC-registered and federal covered regardless of assets under management, so the state may require only a notice filing and fee.
    • C. Correct. Advising a registered investment company makes the firm SEC-registered and federal covered.
    • D. A federal covered adviser is not subject to state registration, even with an office in the state.

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