NASAA Series 63Regulation of Investment Advisers and IARsMedium
An attorney who specializes in estate planning charges clients a separate, itemized fee for reviewing their investment portfolios and recommending specific securities transactions, in addition to fees charged for drafting wills and trusts. Under the Uniform Securities Act, the attorney's investment-related activities:
- Aare excluded only if the attorney holds a CFP designation
- Brequire investment adviser registration only if the attorney manages more than $100,000 in client assets
- Care excluded because attorneys are automatically excluded from the investment adviser definition
- Drequire investment adviser registration because charging a separate fee for securities advice is not incidental to the practice of law
Show answer & explanationAnswer & explanation
Correct answer: D. require investment adviser registration because charging a separate fee for securities advice is not incidental to the practice of law
The LATE exclusion (lawyers, accountants, teachers, engineers) applies only when investment advice is solely incidental to the professional's practice and no special compensation is charged for it. Charging a separate, itemized fee for securities advice removes the exclusion, triggering IA registration.
Why the other options are wrong
- A. A CFP designation has no bearing on the LATE exclusion.
- B. There is no dollar threshold exception under the LATE exclusion.
- C. Attorneys are not automatically excluded — the advice must be incidental and uncompensated separately.
LATE Exclusion Limits
Lawyers, accountants, teachers, and engineers are excluded from the IA definition only if advice is incidental to their profession and no special compensation is charged.
- Separate fee for securities advice destroys the exclusion
- 'Incidental' means advice is not the primary service
- Applies to CPAs, attorneys, teachers, and engineers alike
Memory trick: Charge extra, lose the exclusion, register as IA