Communications, Contracts, Compensation and Fiduciary Ethics
Ethics questions test disclosures, client contracts, advertising, compensation, custody, discretion, suitability, fiduciary duty, conflicts, and confidentiality.
How to study the Series 65
Treat the Series 65 as an adviser competency exam: quantify risk, classify the product, profile the client, then apply fiduciary and registration rules.
Core concepts
Concept 1
Adviser communications must avoid misleading performance claims, unlawful registration representations, and incomplete disclosures.
Exam cue: Ask what the adviser said, omitted, charged, held, or controlled.
Concept 2
Client contracts, compensation, performance fees, pay-to-play, soft dollars, custody, discretion, cross transactions, and minimum financial requirements require rule-sensitive analysis.
Exam cue: For custody, identify whether the adviser can access client funds or securities.
Concept 3
Fiduciary duty centers on loyalty, care, disclosure, conflicts, confidentiality, and putting the client first.
Exam cue: For conflicts, choose disclosure and mitigation rather than silence.
Risk pitfalls and guardrails
Calling disclosure a cure for every conflict.
Guardrail: Avoid answers that skip client profile, risk, disclosure, custody, approval, or fiduciary analysis.
Treating performance guarantees as acceptable marketing.
Guardrail: Do not use a return measure without matching it to cash-flow and benchmark context.
Ignoring custody because a third-party custodian exists.
Guardrail: Avoid answers that skip client profile, risk, disclosure, custody, approval, or fiduciary analysis.
Memory anchors
Disclosure
Disclosure should be full, fair, and timely enough for informed client consent.
Performance Guarantee
Advisers should not guarantee investment performance.
Advisory Contract
Advisory contracts must avoid impermissible terms and disclose material conditions.
Advertising Rule
Advertising and correspondence must avoid misleading claims.
Performance Fee
Performance fees are limited and must satisfy applicable rules.
Soft Dollars
Soft-dollar arrangements must fit eligible research or brokerage uses and be disclosed.
Custody
Custody means holding or having authority to obtain client funds or securities.
Trading Discretion
Discretionary authority requires proper authorization and supervision.
Fiduciary Duty
Fiduciary duty requires loyalty, care, and conflict management.
Client Confidentiality
Client information must be protected from improper use or disclosure.
Checkpoint rule
Do the check-up only after you can summarize each concept in one sentence and identify one dangerous pitfall from memory.
Knowledge Check (after reading)
Short check-up to confirm understanding of this module.
Check-up Questions
An agent tells a customer a stock is guaranteed to double in value. Why is this statement prohibited?
An agent omits a material fact when recommending a security to a customer. Why can omitting a material fact be a violation?
Answer all questions to submit.
Next step personalized recommendations
Continue learning
Move forward only after this module is stable.
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