Oh Ronnie leader of testy exam prep LLC we want to talk about some silly 65 test concepts today a couple of concepts that you can expect to see on your series 65 exam first night we're going to talk about a couple things today first thing I want to talk about of course is Form ADV Form ADV is used for a couple of different reasons for all investment advisors one is the standard registration documents for both States as well as federal and Fiveways now again remember I say this on the video course series 65 video of course every time you come across an investment advisor question you have to determine which one they are rules are often different for each type of investment advisor okay so anyway Form ADV is used for the registration standard registration for both state and federal advisors it is also used or at least part of it is used as the disclosure or brochure okay but you know my federal law is required to be received by all investment advisor clients ok so let's talk about generally what the Form ADV contains I think you should or you probably do already know then it comes in two parts part 1 and part 2 you know and there's a part 1 a 2 part 1 being sitting with the part 2 I tell people generally they're not going to get too specific into the difference aids and B's for example the part 1 it B is not used by federal advice the state advisors I generally don't to tell people that that's a testable part okay anyway the first thing we want to take a look at part one is is the general information about the firm itself for example okay it's principal addresses right where is the principal home office address the form of business right is it an LLC is it a c-corp is an escort of that type of thing type of business that they generally engage in right most advisors a lot of advisors have specialties maybe it's a structured bond ladder or structured bond portfolios or stock portfolios based on Modern Portfolio theory maybe they deal solely in a state planning maybe they deal in solely financial plans something like that what their main type of businesses also information about the officers directors owners partners whatever you want to call write all the information biographical background and a disciplinary action that might have been bestowed upon them but that's important because in an entirely separate test question what you'll often find is a question that would be who is automatically registered as an investment advisor rep and of course it's these guys the officers the directors over sparse right are automatically registered as I a arms investment advisor representatives that's almost always a testable question it's been on the test for as long as I have known twenty years or so right so you might when asked about the registration of advisors might be asked specifics as to what form a DV contains now whether they ask Form ADV part one or two I doubt it I don't think it's that specific it's asking for this information and again this is kind of a separate question all on its own about who is automatically registered as IA ours okay so you can expect to see a couple questions just from that material alone awesome we know that a portion of the adv is used as the disclosure brochure now correct me if I'm wrong a lot of the textbooks practice questions refer to the disclosure brochure as required by the investment advisor act of 40 which is federal law of course but is required for all investment advisors both state and federal however on the test I generally don't see or hear this phrase used at all they might simply say require documents or since we know that the form a DVD part 2 is used as the disclosure brochure the test question might specifically refer to Form ADV required documents something like that very rarely will they ever referred to this as the disclosure brochure on the real test the textbooks the practice questions use that for it's a lot the real test uses it very rarely if at all instead it will simply refer to the form a TV part - okay and again we know there's two parts to it but generally speaking I don't know if any test question will actually to distinguish between those two LM very easy what we charge right the fees how we charge it and when we charge it essentially okay and Part B is about the reps and their biographical information so people say you know B is for bodies you know that's about the iars themselves that but generally like I said I don't hear too many questions that are asking specifically distinguished from Parts A or Part B same with the part one as well very rarely if at all will they ever ask you to distinguish between the two separate parts okay the textbook goes into a long long discussion practice questions on the different parts but generally on the test it's far more general okay more of a 30,000 foot level kind of view that okay so again this is generally what they're going to be using in a test question that represents the disclosure brochure so again you got to make that distinction when you start reading test questions right we are hired by a client to provide advice and must provide the required form a TV that's kind of how they will ask it or refer to it on the test they won't say we will provide the disclosure brochure okay also they will ask Lynn isn't required and are we required to send annual updates right now that kind of depends on the state versus federal we know there's a 48-hour prior rule for state advisors prior to contract date whatever think that is let's say it's July 1st right so it has to be at least 48 hours prior to that or the customer that against automatic five days to rescind the contract right they refer to that as a free look period okay that is often test almost always tested especially about the ability to rescind the contract for federal advisors it's at or prior to the contract it okay then of course are we required to resend on an annual basis again it differs between state and federal state advisors do not need to reset state advisors only if there are material changes in the form ATV which you know there always is or upon request which is almost always s been requested yeah so that again is the state adviser only if there's material changes or upon request the Federal Advisory okay must resend annually within 120 days of their fiscal year end that has been a testable question in the past that time period all right generally the answers will say 90 days from calendar year at 90 days from fiscal year end 120 days from calendar and 120 days from fiscal year and those are the answer choices thank that can show up again this is for the federal advisor required to resend annually Form ADV part 2 right which is to ask the disclosure brochure okay so several questions all together first from the general statement for registration and then also as use as a disclosure brochure either state or federal when it has to be sent and does it have to be resent on an annual basis these are all testable questions they have all been on the test for many many years you can expect to see them okay also now a couple other little concepts I just don't like the way the textbooks describe these so I wanted to take a minute if that's okay to help you understand put a little context allow some of the concepts back which you know is easy to lose the context around some of these concepts when you're reading a 700 page textbook so I like to in my video course in my live classes like to put a little context around us one of these is an investment advisor solicitor okay which again is on the test at least once okay now by leaning the textbook it almost sounds like this is an individual well when really in the real world it isn't it's actually a firm a third-party firm I know many of these I've seen folks in my classes that represent these firms okay these firms are not registered broker-dealers nor are they registered IAS what they do of course is to affiliate with an independent dieting like LPL or Commonwealth financial these are probably the two largest independent is after for folks who like to open up their own little shop okay so we might have podunk financial podunk financing located in small-town USA somewhere right what are affiliated with LPL or Commonwealth they're kind of a branch office for lack of a better term of Alpena or Commonwealth okay so when they are soliciting clients they are in essence soliciting advisory services on behalf of LPL or Commonwealth or some other independent ia so you see these guys are soliciting clients on behalf of and ia these guys are I a solicitor's okay now they have to provide Form ADV part two right which we know is the disclosure brochure so form a TV has to be provided as with any other advisory client that's no difference there as well as and I a solicitor's brochure okay basically just describing what that relationship is now the customer is also required to sign stating they receive this and then we put that into the plain v okay so it also has to the advisor brochure the solicitor brochure has to be signed by the client and placed in client file okay awesome these fine folks who work at podem Financial must register as I a ours okay now I know specifically there is a test question pertaining to the disclosure requirements and I know there are many questions in practice material pertaining to these folks have to register i AR okay I don't think you'll get both of them on the test you probably get one or the other generally speaking okay so again I hope that puts a little context around what an ia solicitor is okay the textbooks I don't think make this very clear so I hope that helps a little bit that's really the biggest part of that is that there's an additional disclosure required and must be signed not to mention the fact they have to register as IRS okay so I hope that helps out now there is one other little issue and that is for referral fees client referrals okay you might see a scenario where a CPA or an attorney or a mortgage broker or you met some other kind of ancillary professional they refer a customer to us the IAR right and can they research receive referral fees yes sir permit now that thing and what it looks like generally is the testable question okay it generally is going to be a fixed fee we'll pay all of our referral fee is 500 bucks it's a flat fee boom it's not related to the size of the client account or the advisory fees we're going to receive from that account okay so not permitted is the referral fee that's based upon the size of the account okay now again almost always a testable that's probably one you're not going to get a whole lot of them and they can ask it either from the positive or from the negative I've seen one specifically based on where this was the body of the test question a CPA receives client referral fee it's based on the size of the customers account according to whomever this is permitted permitted not permitted something like that so that would be actually the correct answer choice okay so you begin it from either the positive side or the negative side so several potentially test questions for you form a TV based on registration as well as the disclosure brochure okay and the ancillary question about the officers and directors who are automatically registered is iars okay then of course a question pertaining to the I a solicitor hope that gave you a little bit more context in the series 65 video course you will also see that very same context as well as the client referral fees generally one question on each of these and then several questions pertaining to the form ATP okay so I hope that helps again you can obtain the entire series 65 video course on our platform which can be obtained through the test peak exam prep com website any questions comments opinions anything that you might have please feel free feel free to drop me a line brian at teskigi exam prep comm be more than happy to help you I like to tell people a joke about this that I'll even put it in the test world I have no real life so please feel free if you when I ever drop me a line I also do some private tutoring via Skype I've Skyped with folks from all over the country every corner of the country from Florida to New Hampshire to the state of Washington to California and everywhere in between as well so again hope that helps hope to see you down the road take care get that P get this test out of your life take care [Music] you