Chapter 6: Communication with Customers and Prospects
This chapter covers 20% of the Series 63 exam (approximately 12 questions) - the second-largest section. It governs how securities professionals communicate with and serve their clients.
What You'll Learn
| Unit | Topic | Key Concepts |
|---|---|---|
| 1 | Required Disclosures and the Brochure Rule | Form ADV delivery, brochure rule, material disclosures, conflicts of interest |
| 2 | Customer Agreements and Account Types | Account documentation, margin agreements, discretionary accounts, fiduciary accounts |
| 3 | Advertising, Correspondence, and Social Media | Communication categories, approval requirements, testimonials, social media compliance, Reg S-P privacy |
Why This Chapter Matters
The previous chapters covered who registers and what gets registered. This chapter covers how registered professionals interact with clients - what they must disclose, how accounts are opened and maintained, and what rules govern their communications.
This is where the rubber meets the road: the exam tests practical scenarios about disclosures, account handling, and advertising compliance that securities professionals encounter daily.
Exam Strategy
At 20% of the exam, this chapter deserves significant study time. Key areas to master:
- Brochure rule: When Form ADV Part 2A must be delivered (initial and annual), the 48-hour rule, and what triggers a brochure supplement
- Discretionary accounts: Written authorization required before exercising discretion
- Margin accounts: Reg T requirements, margin agreement components
- Advertising rules: What requires principal approval, what constitutes misleading communications
- Privacy: Reg S-P requirements, opt-out notices, exceptions for service providers
- Reg BI: Best interest standard for broker-dealer recommendations
Think of it this way: Chapters 2-5 were about getting licensed and getting securities registered. This chapter is about doing the job right: communicating honestly, documenting properly, and protecting client information.