Client Communication

Exam Weight: ~5 questions (4% of exam)

This unit covers required disclosures to clients (fiduciary foundation, material facts, Form ADV, brochure delivery, Form CRS), unlawful representations concerning registrations, the performance guarantees prohibition (including performance fees and qualified client thresholds), client contract requirements (assignment, wrap fees), and correspondence and advertising rules (the Marketing Rule, testimonials, past performance, record retention).

What You'll Learn

• The fiduciary foundation, material fact disclosure, Form ADV Part 2 structure, brochure delivery timing, advisory fee prepayment rule, and Form CRS
• The core prohibition on misrepresenting what registration means, what you can and cannot say, and FINRA membership rules
• The blanket prohibition on performance guarantees, performance fees for qualified clients only, qualified client thresholds, and the symmetry requirement
• Required contract elements, assignment rules, majority vs. minority partnership changes, prohibition on waiver of rights, and wrap fee agreements
• The 2021 Marketing Rule definition, seven general prohibitions, testimonials and endorsements, past performance rules, hypothetical performance, third-party ratings, and record retention