Exam Weight: ~3 questions (3% of exam)
Understanding the different types of clients is fundamental to providing suitable investment advice. Each client type has a distinct legal structure, tax treatment, and liability profile that affects how an investment adviser serves them.
What You'll Learn
- Individuals, natural persons, sole proprietorships, and investment suitability for individual clients
- Business entities: general partnerships, limited partnerships, LLCs, C-corporations, and S-corporations
- Trusts (revocable, irrevocable, testamentary), estates, trustee fiduciary duties under UPIA, and who is the IA's client
- Private foundations, public charities, and donor-advised funds: funding sources, distribution requirements, and tax-deduction differences