NASAA Series 63Communication with Customers and ProspectsMedium
A registered agent of a broker-dealer is preparing a sales presentation for a seminar aimed at prospective clients. The presentation includes several charts illustrating historical market performance and projections for a diversified portfolio. Which of the following disclosures is LEAST likely to be required in this presentation?
- AThe agent's personal Social Security number for identification purposes.
- BA statement that past performance is not indicative of future results.
- CDisclosure of all fees and commissions associated with recommended investments.
- DA statement that the agent is compensated based on product sales.
Show answer & explanationAnswer & explanation
Correct answer: A. The agent's personal Social Security number for identification purposes.
While disclosures about past performance, fees, and compensation are crucial for transparency and regulatory compliance, an agent's personal Social Security number is confidential information and would never be required or appropriate in a sales presentation for identification.
Why the other options are wrong
- B. This is a standard and crucial disclaimer for any performance-related communication.
- C. Disclosure of fees and commissions is a fundamental requirement for transparency.
- D. Disclosure of compensation arrangements is often required to address potential conflicts of interest.
Essential Disclosures in Communications
Key pieces of information that must be communicated to clients/prospects to ensure transparency and prevent misleading statements.
- Past performance disclaimers.
- Disclosure of all fees and charges.
- Disclosure of conflicts of interest (e.g., compensation).
Memory trick: Disclose all risks, fees, and past performance disclaimers, but never private IDs.