Study for the Series 6 Exam

One of the common misunderstandings of "living trusts" is that a person who sets up the trust, i.e., the "grantor," obtains sizeable and valuable tax benefits. This is not correct. The purpose of setting up a living or "revocable trust" is to provide an easier way to transfer assets to beneficiaries upon the death of the grantor, not to obtain tax benefits either for the grantor or for the beneficiaries. The subject of Trusts is contained in the Series 6 Content Outline published by FINRA, indicating that questions on living trusts are contained on the Series 6 exam. (See FINRA Series 6 Content Outline Section 2.2.) Bob Eder discusses Trusts and Estates in his Study for the Series 6 Exam . Here is a sample of Bob Eder's treatment of Living Trusts: Trust Accounts                                                                                                                (2.2) One of the most common trusts that is fairly easy to set up is the living

  Planning to take the Series 6 exam to qualify as a FINRA-registered representative able to sell investment companies and variable products? Then make sure you study the provisions of SEC Regulation D which governs the offerings of private placements. Oh? You didn't think that the Series 6 would include questions on private placements? Then read on . . . Section 1.2 of  FINRA's Content Outline for the Series 6 includes a chunk on the provisions of Regulation D. This regulation sets forth conditions under which an issuer may offer a new issue privately, i.e., without making an offering available to the general public. Regulation D consists of nine sub-rules, 500 through 508, that establish conditions and definitions. Rule 506 is especially important because it lists the conditions for an unlimited amount of securities to be offered. It allows only a limited number of unaccredited investors, but does allow accredited investors to be unlimited in number. Therefore, Series 6 appli

Here is an important rule to study and know for anyone planning to take the Series 6 Exam. FINRA Rule 3110 (b) (4) requires supervision of all correspondence both incoming and outgoing. It covers the  review of incoming and outgoing written correspondence involving retail customers and internal communications relating to a broker/dealer's investment banking or securities business.  Note as important that this rule also covers electronic communications, both incoming and outgoing.  A registered principal of a broker/dealer must review and approve or disapprove all: (a) incoming and outgoing written (including electronic) correspondence to properly identify and handle in accordance with firm procedures, customer complaints, instructions, funds and securities, and communications that are of a subject matter that require review under FINRA rules and federal securities laws. (b) internal communications that require review under FINRA rules and federal securities laws. A registered princ

Several weeks ago, Bob Eder's blog discussed RILAS or Registered Index Linked Annuities. In this blog Bob discusses the major penalties and charges that can reduce a client's return. These penalties include, but are not limited to, surrender charges; interim value adjustments and mid-term investment withdrawals; and tax penalties. This information is based on a publication of the SEC's Office of the Investor Advocate entitled "Report on Activities Fiscal Year 2023." A "RILA" has both insurance components and investment components. An investor puts money into a RILA, generally with a minimum requirement of $10,000 to $20,000.  After making this initial investment, the RILA purchaser then decides how much premium to put into investment options. These investments are relatively short-term, generally not exceeding six years.  This short-term character of RILA investments means that the investment options generally will not exceed the life of the RILA contrac