tag:blogger.com,1999:blog-64740241740851670132024-03-06T14:02:16.150-06:00Passing the Series 65 and 66 examsa blog for the brave people facing the Series 65 or Series 66 exam.Unknownnoreply@blogger.comBlogger221125tag:blogger.com,1999:blog-6474024174085167013.post-86450509424701400192016-05-04T11:43:00.002-05:002016-05-04T11:43:53.153-05:00Crowdfunding is HereStarting May 16, 2016, companies can use crowdfunding to offer and sell securities to the investing public. However, when you think of selling securities, don't confuse the publicly traded stock of, say, FB or SBUX, with the equity purchased through crowdfunding. As the SEC warns in their Investor Bulletin on the topic:<br />
<span style="font-family: Courier New, Courier, monospace;"><b><i>Illiquidity</i></b>. <b>You will be limited in your ability to resell your investment for the first year and may need to hold your investment for an indefinite period of time. </b> Unlike investing in companies listed on a stock exchange where you can quickly and easily trade securities on a market, you may have to locate an interested buyer when you do seek to resell your crowdfunded investment. </span><br />
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In other words, selling these securities would make trying to sell your home seem easy by comparison. On the other hand, buying these securities is about to become extremely easy. As the SEC explains, "Anyone can invest in a crowdfunding securities offering. Because of the risks involved with this type of investing, however, you are limited in how much you can invest during any 12-month period in these transactions. The limitation on how much you can invest depends on your net worth and annual income." Basically, for lower-income and net-worth investors, a few thousand dollars per year can be invested in an early-stage company using crowdfunding. For higher-income and net-worth investors, up to about 10% of the lesser of their income or net worth can be invested--not to exceed $100,000 per year.<br />
Frankly, I'm a little surprised at how liberal these restrictions are. Then again, the SEC is all about full disclosure, and crowdfunding investors will have to sign various acknowledgements before investing and will only be investing through entities registered with the SEC and FINRA. These intermediaries--broker-dealers, mostly--must provide all kinds of education to such investors, because this is about as high-risk as investing can get. As the SEC states, "Before you can make a crowdfunding investment, the broker-dealer or funding portal operating the crowdfunding platform you are using must ensure that you review educational materials about this type of investing. In addition, you will have to positively affirm that you understand that you can lose all of your investment and that you can bear such a loss. You will also have to demonstrate that you understand the risks of crowdfunded investing."<br />
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<a href="http://www.examzone.com/" target="_blank">Need help with your Series 65 Exam?</a>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-6474024174085167013.post-69639499727254207172015-08-28T14:48:00.001-05:002015-08-28T14:53:36.019-05:00This is not the GMATI used to think certain customers were being paranoid when they asked if the computer will adapt to their answers at the testing center. Now that I've examined the structure of the GMAT exam, it all makes perfect sense. On the GMAT your answer to the first multiple-choice question determines the difficulty of the next question presented to you. If you miss the question, you get an easier question. Get that one right, and the difficulty level will rise, allowing you to score more points. The Series 65, on the other hand, generates 140 questions randomly when you fire up your test--no adaptations to what you're doing whatsoever on this exam. And, each question counts the same on the Series 65.<br />
<br />
The GMAT also has a writing section scored by composition instructors and business professors, who use a "holistic" approach to score large batches of essays, as I did when teaching at Alabama State University back in the day. Good news, people--there are no essay questions on the Series 65 exam!<br />
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The GMAT teaches actual learning abilities/skills, while the Series 65 focuses on vocabulary, regulatory concerns, and basic features of securities investing. Therefore, the GMAT actually does put out "old test questions," while the Series 65 never does.<br />
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One advantage you get on the Series 65 exam vs. the GMAT is that you can mark questions for review and then change your answers on the Series 65.<br />
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<a href="http://www.examzone.com/" target="_blank">Need help on your exam?</a>Unknownnoreply@blogger.com1tag:blogger.com,1999:blog-6474024174085167013.post-74615953712571415992015-03-03T09:47:00.001-06:002015-03-03T12:07:21.905-06:00What's Up with this Fiduciary Standard for Brokers Thing?You have probably heard some of the uproar surrounding a proposed rule that would define fiduciary standards for both broker-dealers and advisers uniformly. Currently, advisers are held to a higher fiduciary standard under the Investment Advisers Act of 1940 than broker-dealers, who are held to a mere "suitability" standard under the Securities Exchange Act of 1934. While advisers have to put the client's interests first, broker-dealers merely have to sell products that are suitable--and often the most lucrative to sell, as well.<br />
The Department of Labor enforces ERISA, and four years ago they proposed a rule that would define anyone helping people save through a retirement account as a fiduciary. Although that rule was scrapped, they have just sent another one to the Office of Management and Budget, who has up to 90 days to review it before releasing it to the public. Dodd Frank required the SEC to do a study on a uniform definition of fiduciary standards, which they released back in 2011. Turns out, while the Department of Labor and the White House would love to force agents and broker-dealers to operate under the same standards that fiduciaries do under the Advisers Act, the SEC is not on the same page. The 5 commissioners still are not convinced there is any need for rulemaking here, and one of the Republican commissioners, Daniel Gallagher, fired back at the White House for leaking a memo recently designed to gain support for the DOL rule proposals making stockbrokers fiduciaries, just like their cousins in the advisory side of the business.<br />
Some have stated that the brokerage industry's lobbying group SIFMA opposes any changes to fiduciary standards. Actually, they support a standard--as long as it's fair and does not hold brokers to the same fiduciary standards required of investment advisers.<br />
How do I feel about the whole thing? That it's totally unnecessary. That investors have to pay for advice somehow, and that I myself save untold thousands using a broker-dealer (whom I never talk to) as opposed to giving up, say, 1%, of my account value for someone to take over and start driving with discretion. In other words--investors need different options. Many individuals in a 401(k) account would benefit from talking to a financial planner. Others might need a portfolio manager. And still others--like myself--know what they want to buy and just enter their orders online through a broker-dealer who gives NO ADVICE whatsoever and simply executes trades with accuracy and competence while maintaining custody of assets. Why not give investors as much choice as possible? Because this White House and its Cabinet are often unable to trust the intelligence of the typical American, who if left to his or her own devices would be doomed. Of course, I have a conflict of interest here--if a rule goes out requiring all Series 6 and 7 reps to also get their Series 65 or 66, this would be a major financial benefit to Pass the Test and ExamZone. But, still, the whole thing seems like more effort than it's worth to me.Unknownnoreply@blogger.com4tag:blogger.com,1999:blog-6474024174085167013.post-23811804919315330052015-02-06T10:18:00.000-06:002015-02-06T10:25:04.920-06:00Just Get it Over With Already!Many people fear public speaking. So, it's not surprising when they get up before a group and rush through their talk in order to remove the anxiety as quickly as possible. As a kid the only thing that truly scared me was something most people take for granted--getting a haircut. I'm not sure why, but I would procrastinate the inevitable date with the barber as long as possible, until finally I would get up the nerve to deal with the anxiety. As soon as the little paper collar went around my neck, I would grip the armrests tightly and hold on for dear life. Just get it over with, please. As I got older, I must have tried over a dozen hair stylists. Even though I cared about my appearance, I just wanted the haircut to be over with. Not surprisingly, I ended up with some of the worst haircuts imaginable. Senior year, somebody's older sister gave me short bangs with long hair in the back, but I told myself I didn't care--it had saved me the dreaded trip to the barber or hair styling salon, so it was fine.<br />
Nonsense. All I was doing was ignoring the big picture. The big picture was that I had hair, that this hair would have to be cut every so many weeks, and that I would, therefore, have to learn to deal with haircuts. Similarly, you have a painful stimulus to deal with called the Series 65 or Series 66 exam. Unfortunately, these tests are designed to make you perform at the testing center, eliminating wrong answers and thinking creatively, even when your palms are sweating and your tongue is thick with fear. I know, I know. You don't wanna, same way I didn't wanna get my haircut. And, the same way I would let Johnny Jedder's older sister ruin my hair at age 18, you are probably rushing through the practice questions with only one focus in mind--getting it over with.<br />
Sorry. Until you are ready to sit down in the chair and work through practice questions for as long as 1 minute or more each, you will be spinning your wheels, just trying to make the pain go away.<br />
I'm going to write about test-taking strategies up ahead, but the first step is to learn to accept the anxiety and learn to work through the questions in spite of it. Because unless you are already a CFP or PFS, dear friend, you can't just make it all go away the way I did:<br />
<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto; text-align: center;"><tbody>
<tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgqNTmk4_WJlFznSoysFvbIT-4x0xx26ceCy5CLnYQD2ZUy5p30n9uI55Pi7g4W-kBGOaMX2Morpf4y05rw-PbYHda2sEvPScWL3J4eq8LADXv3Rz8rQkoZx2b5Qu3z4BmhcWF8JKZg22w/s1600/atReunion.jpg" imageanchor="1" style="margin-left: auto; margin-right: auto;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgqNTmk4_WJlFznSoysFvbIT-4x0xx26ceCy5CLnYQD2ZUy5p30n9uI55Pi7g4W-kBGOaMX2Morpf4y05rw-PbYHda2sEvPScWL3J4eq8LADXv3Rz8rQkoZx2b5Qu3z4BmhcWF8JKZg22w/s1600/atReunion.jpg" height="175" width="200" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">The nuclear option</td></tr>
</tbody></table>
<br />Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-6474024174085167013.post-56868352891508914532015-02-04T17:00:00.001-06:002015-02-04T17:00:51.259-06:00Purchasing PowerCPI measures the overall level of pricing for the goods and services that consumers buy over the month. Typically, the October number is compared both to September and the previous year's October. CPI can be positive or negative. If the CPI is running at 2% annually, investors are losing that much purchasing power. If, however, the CPI is negative, investors are gaining purchasing power.<br />
So, if you got a question like the following, how would you answer it?<br />
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Aunt Alice keeps her extra cash in a coffee can hidden in a secret compartment of her basement. Last year, the CPI was -1%. Therefore, which of the following is accurate?<br />
A. Aunt Alice's real rate of return was -1%<br />
B. Aunt Alice's real rate of return was 0<br />
C. Aunt Alice's real rate of return was +1%<br />
D. Aunt Alice's real rate of return was -2%<br />
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EXPLANATION: although putting money in a coffee can is not an investment, Aunt Alice got lucky last year when prices fell by 1% overall. Therefore, she is 1% above the level of pricing. The answer is . . . C.Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-6474024174085167013.post-50560148417426221642015-01-31T09:34:00.001-06:002015-01-31T09:39:50.891-06:00What the Series 65 or Series 66 Question Didn't SayLately, some of my tutoring clients have been using our textbook, Pass the 65, or Pass the 66, to write their own practice questions. Some of the questions that are coming out are outstanding, too. Like this one:<br />
<br />
<div class="MsoNormal">
<span style="font-family: Times, Times New Roman, serif;">An investor interested in purchasing 100 shares of stock in
Amazon should place a<o:p></o:p></span></div>
<div class="MsoListParagraphCxSpFirst" style="mso-list: l0 level1 lfo1; text-indent: -.25in;">
<!--[if !supportLists]--><span style="font-family: Times, Times New Roman, serif;">A.<span style="font-size: 7pt; font-stretch: normal;">
</span><!--[endif]-->Sell Stop<o:p></o:p></span></div>
<div class="MsoListParagraphCxSpMiddle" style="mso-list: l0 level1 lfo1; text-indent: -.25in;">
<!--[if !supportLists]--><span style="font-family: Times, Times New Roman, serif;">B.<span style="font-size: 7pt; font-stretch: normal;">
</span><!--[endif]-->Buy Stop<o:p></o:p></span></div>
<div class="MsoListParagraphCxSpMiddle" style="mso-list: l0 level1 lfo1; text-indent: -.25in;">
<!--[if !supportLists]--><span style="font-family: Times, Times New Roman, serif;">C.<span style="font-size: 7pt; font-stretch: normal;">
</span><!--[endif]-->Market Order</span></div>
<div class="MsoListParagraphCxSpLast" style="mso-list: l0 level1 lfo1; text-indent: -.25in;">
<!--[if !supportLists]--><span style="font-family: Times, Times New Roman, serif;">D.<span style="font-size: 7pt; font-stretch: normal;">
</span><!--[endif]-->Buy Stop Limit</span><o:p></o:p></div>
<div class="MsoListParagraphCxSpLast" style="mso-list: l0 level1 lfo1; text-indent: -.25in;">
<br /></div>
<div class="MsoListParagraphCxSpLast" style="mso-list: l0 level1 lfo1; text-indent: -.25in;">
EXPLANATION: obviously, you can eliminate any answer with the word "sell" in it, but notice how the question seems to be missing key details. That will really do a number on a test taker, trust me. Don't panic. Whatever information was <i>not </i>provided is just as important as what was provided. What in the question justifies either a "buy stop" or a "buy stop limit" answer? I see nothing about wanting to buy only if the stock trades up at a certain price. All I see is that an investor wants to buy 100 shares of stock. So, if you want to get your order filled, you place a market order--Answer C. Right? At first, a question like this can seem too hard--just hang with it. Consider what the question said, and what it didn't. <a href="http://www.examzone.com/" target="_blank">Need Help With Your Test?</a></div>
Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-6474024174085167013.post-48757935302426371632014-12-11T10:00:00.002-06:002014-12-11T10:13:46.133-06:00Series 65 and Series 66 questions with TWO right answers?<span style="background-color: white; color: #141823; font-family: Helvetica, Arial, 'lucida grande', tahoma, verdana, arial, sans-serif; font-size: 14.3999996185303px; line-height: 20px;">Sometimes I hear tutoring clients state in frustration that "test questions often have a good answer and then a better answer." What is actually the case is that test questions have an answer that SORTA works and an answer that ACTUALLY works. Let's take a look at what you'll encounter at the exam center:</span><br />
<span style="background-color: white; color: #141823; font-family: Helvetica, Arial, 'lucida grande', tahoma, verdana, arial, sans-serif; font-size: 14.3999996185303px; line-height: 20px;">To determine how gross margins may have affected net margins, an investor using fundamental analysis techniques would examine the corporation's </span><br />
<span style="background-color: white; color: #141823; font-family: Helvetica, Arial, 'lucida grande', tahoma, verdana, arial, sans-serif; font-size: 14.3999996185303px; line-height: 20px;">A) balance sheet </span><br />
<span style="background-color: white; color: #141823; font-family: Helvetica, Arial, 'lucida grande', tahoma, verdana, arial, sans-serif; font-size: 14.3999996185303px; line-height: 20px;">B) income statement </span><br />
<span style="background-color: white; color: #141823; font-family: Helvetica, Arial, 'lucida grande', tahoma, verdana, arial, sans-serif; font-size: 14.3999996185303px; line-height: 20px;">C) 8K </span><br />
<span style="background-color: white; color: #141823; font-family: Helvetica, Arial, 'lucida grande', tahoma, verdana, arial, sans-serif; font-size: 14.3999996185303px; line-height: 20px;">D) 1041</span><br />
<span style="background-color: white; color: #141823; font-family: Helvetica, Arial, 'lucida grande', tahoma, verdana, arial, sans-serif; font-size: 14.3999996185303px; line-height: 20px;"><br /></span>
<span style="background-color: white; color: #141823; font-family: Helvetica, Arial, 'lucida grande', tahoma, verdana, arial, sans-serif; font-size: 14.3999996185303px; line-height: 20px;">DISCUSSION: We can rule out "1041," a tax form used by trusts and estates. We can rule out "balance sheet," too, as that is a static snapshot showing financial strength in terms of assets and liabilities. The results of operations over the quarter or the year are found on the income statement. Yes, but the income statement is also contained in an 8K! Therefore, there are 2 RIGHT ANSWERS!!!</span><br />
<span style="background-color: white; color: #141823; font-family: Helvetica, Arial, 'lucida grande', tahoma, verdana, arial, sans-serif; font-size: 14.3999996185303px; line-height: 20px;">Maybe not. Even if we cling to "8K" as an answer, what is our answer based on--the fact that we would open up the 8K for only one reason--to look at the income statement.</span><br />
<span style="background-color: white; color: #141823; font-family: Helvetica, Arial, 'lucida grande', tahoma, verdana, arial, sans-serif; font-size: 14.3999996185303px; line-height: 20px;">Upon further review, we see that the two answers are not equal. 8K kinda/sorta works, while income statement closes the deal, without question.</span><br />
<span style="color: #141823; font-family: Helvetica, Arial, lucida grande, tahoma, verdana, arial, sans-serif;"><span style="background-color: white; font-size: 14px; line-height: 20px;">A good question will force you to think a while--which is okay, since you are entering a thinking person's profession. Good luck out there, people!</span></span><br />
<span style="color: #141823; font-family: Helvetica, Arial, lucida grande, tahoma, verdana, arial, sans-serif;"><span style="background-color: white; font-size: 14px; line-height: 20px;"><br /></span></span>
<a href="http://www.examzone.com/" style="font-family: Helvetica, Arial, 'lucida grande', tahoma, verdana, arial, sans-serif; font-size: 14px; line-height: 20px;" target="_blank">need help with your exam?</a>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-6474024174085167013.post-52431573005087244382014-08-05T09:51:00.000-05:002014-08-05T09:54:20.482-05:00Asset Allocation and Diversification for the Series 65 and Series 66 examsA diversified portfolio of stocks would not contain all technology or pharmaceutical companies, for example. If there were a number of oil company stocks, they would be diversified between domestic and international companies, producers of oil and refiners of oil. They would not all be small cap or large cap. A bond portfolio would not be all triple-A-rated or all junk, but would instead be diversified throughout different maturities, credit quality, and issuers that don’t all come from the same industry.
Asset allocation and diversification are somewhat related portfolio management techniques. Where they differ is that asset allocation puts set percentages of capital into various types of stocks, bonds, and cash to achieve strategic goals in regards to risk and reward. Within those allocations, we use diversification to balance the risk of one investment with the characteristics of another. So, 20% large-cap growth, 20% mid-cap growth, 30% small-cap growth, and 30% long-term bond is an asset allocation. Drill down into the “20% large-cap growth” category, and the various companies owned would come from different industries in order to maintain diversification.<a href="http://www.facebook.com/helpmepass"></a>
Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-6474024174085167013.post-1473208364404608572014-07-03T09:07:00.000-05:002014-07-03T09:21:12.137-05:00Don't Make AssumptionsSome exam candidates want quick black-and-white answers. If they read something about "10 years" in terms of the Administrator's ability to deny/suspend/revoke a license, many want to memorize that number and apply it automatically. Unfortunately, it doesn't work that way--sometimes people are let into the industry in spite of recent felonies, and sometimes people with certain misdemeanors are kept out indefinitely. The idea is that if you apply for a license and have felony convictions or specific misdemeanor convictions, the state can use those facts to deny your application, unless they decide otherwise.
In the textbooks I mention that LLCs are associated with "limited life," unlike corporations . Many exam candidates become uneasy at that statement. Wait--wait! My brother owns an LLC and it doesn't expire on any particular date!
That's not quite what we're saying. In an LLC the operating agreement has a section called "Dissolution and Termination." In an LLC of which I am a member, this section states that the whole thing will be dissolved either on the date fixed for termination or by unanimous written agreement by the members. If the LLC were formed to produce a movie, we would dissolve it fairly quickly. On the other hand, if we were Five Guys Burgers and Fries, LLC, we would have no plans to shut down anytime soon, but their operating agreement surely lists certain events that would trigger dissolution of the LLC. Of course, as a private company, that is not information available to the general public, so I will not make the mistake of bothering them with an email.
In any case, take in new information slowly and thoughtfully. Avoid jumping to conclusions. Did you just read that you can avoid a penalty, or did you think the text said you could take the money out tax-free? Big difference, right? The exam will exploit our tendency to rush through the questions. Your job is to slow everything down both as you study and as you take--and pass--your Series 65 or Series 66 exam.Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-6474024174085167013.post-50186937587028750512014-04-23T19:53:00.001-05:002014-04-23T19:58:05.558-05:00SEC Issues Stop Order to Prevent Northern California Company From Issuing StockJust like the Administrator at the State level, the SEC sometimes issues stop orders when they don't like what they see--or don't see--in a registration statement for an offer of securities. Let's take a look:
Washington D.C., April 23, 2014 — The Securities and Exchange Commission today issued a stop order to prevent a Northern California-based company from issuing stock after including false and misleading information in its amended registration statement for an initial public offering (IPO).
Stop orders prevent the sale of privately held shares to the public under a registration statement that is materially misleading or deficient. If a stop order is issued, no new shares can enter the market under that registration statement until the company has corrected the deficiencies or misleading information.
According to the SEC’s stop order against Comp Services Inc., its registration statement fails to disclose the identity of the control person and promoter behind the company, and falsely states that Comp Services earned revenue for providing computer services even though the company has never earned any revenue. The registration statement has been amended 10 times, most recently in December 2013.
“Comp Services gave investors a false and misleading portrayal of the company as they were deciding whether or not to invest,” said Michele Wein Layne, director of the SEC’s Los Angeles Regional Office. “This stop order ensures that Comp Services stock cannot be sold in the public markets under this misleading registration statement.”
Comp Services consented to the issuance of the stop order, which also triggers the bad actor disqualifications to prohibit Comp Services from engaging or participating in any unregistered offering conducted under Rule 506 of Regulation D for a five-year period.
The SEC’s investigation, which is continuing, has been conducted by Roberto Tercero and Spencer Bendell in the Los Angeles office.Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-6474024174085167013.post-13459449234851039152014-04-01T15:56:00.001-05:002014-04-01T16:02:15.973-05:00Insurance agents giving investment advice in the State of Tennessee Insurance agents selling fixed and indexed annuities have been operating in a gray area in many states for many years now. The definition of "investment adviser" under state securities law, remember, looks something like this:“Investment adviser” means any person who, for compensation, engages in the business of advising others, either directly or through publications or writings, as to the value of securities or as to the advisability of investing in, purchasing, or selling securities, or who, for compensation and as a part of a regular business, issues or promulgates analyses or reports concerning securities."
Right there, you can probably see how easy it would be for a state regulatory office to determine that an indexed annuity salesperson is in the business of advising others. . . as to the advisability of . . . selling securities. Therefore, he is not acting just as an insurance product salesman; he's acting as an unregistered investment adviser if he tells people to liquidate mutual funds and put the proceeds into his safe-money product.
While many states wait for someone to step out of line and then handle it on a case-by-case basis, the State of Tennessee has come right out and stipulated what an insurance agent can do versus what a securities representative can do. As we see from their bulletin "Licensing and/or Registration Requirements and Permitted Activities," an "Insurance-Only Person" and a "Securities-Only Person" cannot engage in the same activities. The bulletin, at http://www.tn.gov/securities/documents/InfoPostWebREQUEST052213.pdf is something I encourage you to read regardless of your state. While you might be surprised to see what is prohibited for an "insurance-only person," you might also be surprised to see the prohibitions for those who are considered "securities-only persons." For example, a securities-only person may NOT "discuss the cost versus benefits of insurance in specific terms" and may NOT recommend specific allocations, in dollars or percentages, between insurance and securities investments.
Probably more important, though, an insurance-only person may NOT discuss risks specific to the consumer's individual securities portfolio and may NOT recommend the liquidation of specific investments/securities to fund the purchase of an annuity/insurance product. <a href="http://www.passthe65.com"></a>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-6474024174085167013.post-45505519564783535862014-03-31T16:45:00.001-05:002014-03-31T16:45:44.125-05:00What does "per capita" mean in estate planning?A quick follow-up to the post on the term "per stirpes" here, since the Series 65 exam and Series 66 exam could easily bring up the terms.
If a will or revocable trust states that the beneficiaries inherit their shares "per stirpes," if a beneficiary has died by the time the deceased passes on, his or her share will go to his or her descendants. That way, if there are three beneficiaries, the estate will be divided into thirds, period.
On the other hand, if the beneficiaries inherit their share of the estate "per capita," a "head count" is taken of all the living beneficiaries at the time of death. If there are three beneficiaries named in the will or trust but one has already died, then the assets are divided among just the remaining two. <a href="www.passthe65.com"></a>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-6474024174085167013.post-36472176843546238552014-03-07T10:25:00.003-06:002014-03-07T10:28:25.688-06:00Online Classes for Series 65 and Series 66 ExamsNo matter which materials you have, I recommend that you sign up now for our live online classes for the Series 65 and Series 66 exams. We present the exam material in digestible bites of information that you can review on your own time at your own pace by watching the recording. No instructor-at-the-whiteboard or talking heads. This is full-color animation, photos, and voiceover, making the material understandable and often interesting.<br />
Seriously. Best of all, you can ask questions during the session!<br />
Use the link at the end of this post to get on board and put the Series 65 or Series 66 exam behind you. <a href="http://www.examzone.com/apex/ezQuickCalendar?series=65&month=2&year=2014">Sign Up Now!</a>Unknownnoreply@blogger.com1tag:blogger.com,1999:blog-6474024174085167013.post-80726754004782565342014-03-04T11:51:00.002-06:002014-03-04T11:55:07.022-06:00What is Per Stirpes, Please?<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjisXd_YC6jIoxA0faWuzt3WZxSs8WiAkbp9rHE4PQDOIramI63lSLFkhfdAg7S2r_r5w0GNMs0TZOf9nek14yZQ2KRZUKZbuL1JREPv1-mjJxJXf7xtlZCP8mj5gYq0MJpy4C8gXVC7oY/s1600/legaldoc.jpg" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjisXd_YC6jIoxA0faWuzt3WZxSs8WiAkbp9rHE4PQDOIramI63lSLFkhfdAg7S2r_r5w0GNMs0TZOf9nek14yZQ2KRZUKZbuL1JREPv1-mjJxJXf7xtlZCP8mj5gYq0MJpy4C8gXVC7oY/s1600/legaldoc.jpg" height="150" width="200" /></a>The Series 65 and Series 66 exams ask a handful of questions about estates and trusts, and you could end up seeing the phrase <i>per stirpes </i>on a test question. In fact, you'll likely bump into it in your financial planning activities, so it is worth knowing even if it doesn't show up. As I just pulled from a Transfer on Death Beneficiary Agreement for a brokerage account, " the term 'per stirpes' shall mean the following:<br />
if any primary or contingent Beneficiary does not survive the account owner, but leaves surviving descendants, any share otherwise payable to such Beneficiary shall instead be paid to such Beneficiary's surviving descendants."<br />
And, there you have it. If a will, a trust, or a transfer on death account name a beneficiary, the term "per stirpes" means that if that beneficiary is to be paid but has passed away, his or her share passes to his or her own beneficiaries. <a href="http://www.passthe66.com/">Pass the Series 66 exam</a>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-6474024174085167013.post-1040239972493764322014-02-25T16:16:00.000-06:002014-02-25T17:21:59.406-06:00Capital Gains and Capital Losses on Real Estate Sales<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhLkIL1fgKeQE2KpOaGQgraUUoUhf_1GSbiJFufHYcvyxHWRoxK10X7kZJifFDl6LATvoV6-sAouQs5u1UfK_IQm1FPXEcVPBFSFBXYva-wDEW0eVpwQ2vUD-q_8amGLmC8un4NUJMD31M/s1600/house.jpg" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhLkIL1fgKeQE2KpOaGQgraUUoUhf_1GSbiJFufHYcvyxHWRoxK10X7kZJifFDl6LATvoV6-sAouQs5u1UfK_IQm1FPXEcVPBFSFBXYva-wDEW0eVpwQ2vUD-q_8amGLmC8un4NUJMD31M/s1600/house.jpg" height="240" width="320" /></a>The Series 65 and Series 66 exams might ask a question or two about the tax implications of selling real estate, so let's look at some key issues here. First, if you sell your primary residence at a loss, you get no tax benefit whatsoever. Therefore, if your house is so underwater at this point that you will never sell it for a gain, you might consider turning it into a rental property and finding other digs. This way, you can take depreciation on the property, which will cancel out some or all of the rent you receive for tax purposes. And, when you sell at a loss, you can use that to offset taxable income. I'm not saying that would be cause for a case of Dom Perignon, but it might turn a bad situation into something a little more beneficial.<br />
On the other hand, if you have a house that will sell for a capital gain, you might be able to avoid paying any tax on it at all. But, you have to be able to go back 5 years from the date of sale and show that you both owned the house for any 2 years during that period <i>and </i>used the house for any 2 years during that period. These 2-year periods do not have to be continuous and they do not have to happen at the same time. For example, I'm sitting on a house with some real equity at the moment. While I have <i>used </i>the house for two years at this point, starting as a renter, I have only <i>owned </i>it since last November 1st. Therefore, to turn any capital gain into a tax-free gain, I need to <i>own </i>the place for another 21 months. That means I can either live here for 21 months, or rent the place out for some or all of that time.<br />
Either way, if I sell a year from this coming November and realize, say, a $75,000 capital gain it will all be tax-free. If I didn't establish the two-year ownership period going forward and sold for a $75,000 capital gain, on the other hand, the IRS would tax it at either 15% or 20%, meaning I would keep only $63,750 if taxed at 15% or just $60,000 if taxed at 20%.<br />
There are ways around having to both own and use a residence for 2 of the previous 5 years and still get the tax-free capital gain, but I don't qualify for any of them. If interested, check out www.irs.gov "selling your house". <a href="http://www.passthe65.com/">pass your series 65 NOW!</a>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-6474024174085167013.post-19008603947539394912014-02-12T14:45:00.001-06:002014-02-12T15:06:16.756-06:00Shark Tank and The Profit<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi8rG_2pH7XsiHUtV_5mlIcTpdBdTdirOCGS3cA1J2I4sIuHoZA9GdUQvp3t1WSbStKj11nsWJTmRRqx1fsDrsNsW79G-YuSBZTOVlCpW7auqodmpNfnzknsXeLU1y-zGUppQRfkPaz0TI/s1600/shark.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi8rG_2pH7XsiHUtV_5mlIcTpdBdTdirOCGS3cA1J2I4sIuHoZA9GdUQvp3t1WSbStKj11nsWJTmRRqx1fsDrsNsW79G-YuSBZTOVlCpW7auqodmpNfnzknsXeLU1y-zGUppQRfkPaz0TI/s1600/shark.jpg" /></a></div>
To understand different investment approaches, one could watch two "reality TV" shows, both of which I caught last night: Shark Tank, and The Profit. In the Shark Tank, venture capitalists listen to start-up companies make pitches for capital in exchange for a percentage of equity in the business. Usually, the venture capitalists--the "sharks"--invest somewhere between $50,000 and $500,000 for a minority interest in the company. They are only interested in businesses that are already doing well, where the entrepreneur is kicking butt and seems able to adapt and solve problems without melting down. The companies have an interesting brand that either solves a problem or fills a niche, and their sales are growing. The best ways to turn off the spigot of capital from the sharks is to do any of the following individually or in any combination: fudge on your numbers, report either small or shrinking sales, reveal that after 10 years of hard struggle your business still makes no profit. The "sharks" are venture capitalists who invest in businesses long before any thought of an IPO to public investors, so whatever "growth investors" in public equities are looking for, so are the sharks--only more so. They are looking for a great idea, a great founder, and a business model that can easily be duplicated and scaled with a little bit of help from their rather large wallets. If they have to pay a little premium to get in, so be it. What's a few thousand bucks when we're clearly about to make millions here?<br />
On the other hand, in The Profit, we see an investor named Marcus Lemonis who wants to take an equity stake in businesses that <i>used to be great </i>or <i>could be great </i>if only someone could come in and do some key fix-ups. See, growth investors like the sharks are out as soon as they hear even one problem, while turnaround specialists are investors interested <i>only </i>in companies with problems.<br />
If Marcus, the turnaround specialist, sees, say, a pizza restaurant doing $2 million in sales yet still managing to lose $400,000 a year, he's probably interested already. When he takes a closer look, maybe he finds a pretty decent staff of waitresses and pizza chefs, but sees immediately that the delivery personnel and the store manager are weak. There is no advertising, the restaurant looks tired and dated, and no one can even see the sign from the highway that passes by the place. While the sharks don't have time to fix all these problems, the turnaround specialist now sees his opportunity. As he loves to remind the viewer, he only focuses on the three P's--product, process, and people. The product must be great to do $2 million in revenue, so that's probably not the issue. As far as the process, Marcus probably quickly invests in new pizza ovens that crank out more pies in less time, and then either re-trains the delivery drivers, equips them with GPS, or both. The first two p's (product and process) are easy--he then has to deal with the scary part, the people.<br />
He's only in charge for one week, so he has to either turn a currently lousy employee into an asset or replace him quickly. Many currently lousy managers are just being human--they don't communicate well; they don't handle constructive criticism; they like to fudge the numbers and then get defensive about it, etc.. Unlike a therapist, who would use a gradual soft-sell approach, Marcus confronts the current problem head-on, usually with as much rudeness as one can get by with without getting punched. After the tears (if female) or threats of violence (if male) the entrepreneur usually comes to recognize that he or she is actually part of the problem and is going to have to listen to the rich guy driving the flashy red sports car if they want to hang onto the business without dragging down the employees and the mom who foolishly took out the second mortgage to keep the thing afloat.<br />
So, Marcus is taking on much more risk than what we call a "value investor," like Warren Buffett. Warren Buffett would not invest money with any of the shifty, defensive people that Marcus routinely works with. For Mr. Buffett, the business is already doing well and is being run by people he trusts implicitly. How much hands-on management does he then do in the acquired companies?<br />
None. If he had to go in and shape things up, he wouldn't be investing in the first place. Warren Buffett doesn't refer to himself as a "value investor," actually--he just likes to buy great companies at currently marked-down prices. That tends to rule out growth stocks, as they simply can't be purchased at an attractive price. But it doesn't mean he sits there with a stock screener pouncing when price-to-book or price-to-cash-flow ratios drop to a certain pre-set multiple.<br />
In any case, every investor mentioned above is doing about $3 billion better than I am, so let me get back to my little Simple IRA and see what I can do to boost my total return for the year. <a href="http://www.examzone.com/">Sign Up for Online Classes That Make Sense</a><br />
<br />Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-6474024174085167013.post-3728086276502205272014-01-09T13:03:00.000-06:002014-01-09T13:06:47.367-06:00What is CAPM?CAPM or the Capital Asset Pricing Model is something I would expect you to define rather than calculate on your Series 65 or Series 66 exam. But, the exam will throw out a few tough calculations, so let's figure out the expected return of KKD common stock based on CAPM, just in case. CAPM uses just three numbers: risk-free rate, beta, expected market return. Why does it do that? Because the idea behind CAPM is that investors expect to be compensated not just for the risk they're taking but for the time value of money, too. Therefore, the expected return is just a function of assuming that the investment will receive the riskless rate of return plus a "risk premium." That risk premium is basically just a function of the expected market return and the beta of the stock. So, KKD has a beta of 2. The expected market return is 9%. The rate on 3-month T-bills is 1%. Let's plug in those numbers:<br />
<div>
<br /></div>
<div>
1% PLUS 2-TIMES-9-MINUS-2-TIMES-1%.</div>
<div>
<br /></div>
<div>
Usually we see that in parentheses, but the strange "formula" above shows the order of the operations. Take 1% and hold that thought. Take two times nine (18) minus two times one (2) to get 16. Add 1 plus 16, and Krispy Kreme (KKD) common stock has an expected return of 17%. <a href="http://www.passthe65.com/">Pass your exam!</a></div>
Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-6474024174085167013.post-48788571987882514312013-12-04T09:13:00.002-06:002013-12-04T09:17:04.125-06:00Caution: Investing in Growth Stocks May Cause Serious Injury<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhW0ZDf2XRi20UDmttyiaJSFSAiFDFJm0e9GHeiLECdJhS9S0toG9QNqjxMWW5VHd3DMEusW3WjUNdMDnud7HCD4FmXGIXIjg8bShrFGDtL98z5DQksQG2iNPVl1TtrociYzkIe2JpEXmg/s1600/caution.jpg" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" height="240" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhW0ZDf2XRi20UDmttyiaJSFSAiFDFJm0e9GHeiLECdJhS9S0toG9QNqjxMWW5VHd3DMEusW3WjUNdMDnud7HCD4FmXGIXIjg8bShrFGDtL98z5DQksQG2iNPVl1TtrociYzkIe2JpEXmg/s320/caution.jpg" width="320" /></a></div>
When an exam question implies that investing in growth stocks is riskier than investing in value stocks, it's not necessarily saying that growth stocks are issued by companies likely to melt down. The real risk of investing in growth stocks is that they are priced for perfection and, therefore, super-sensitive to any tidbit of bad news. For example, I'm holding a few hundred shares of KKD, which is trading at what seems a crazy-high PE ratio of about 80! The other day the company announced that it had met Wall Street analysts' expectations, had increased their earnings-per-share by 33% compared to last year, with sales/revenue up 6.7%. What happened to the stock? It dropped about 25%.<br />
Huh?<br />
Yes. If a stock is already pumped up with such a high earnings multiple, even a lack of awesome news can cause a sudden and significant drop in market price. Luckily, I already knew this and used a sell-stop to take a $13,000 profit during the previous earnings announcement.<br />
But, with value stocks--Pfizer and GM--I never think about sell-stop orders. I just follow the company and hold the stock unless there is clearly disaster up ahead.<br />
And, that's the difference between investing in growth stocks versus value stocks. With growth stocks, if the news isn't really good, the share price can plummet. That's because good news has already been baked into the inflated stock price. <br />
With value stocks, as long as the news isn't terrible, the market price usually hangs tough--since bad news has already been priced into the stocks.<a href="http://www.passthe65.com/">Pass your Series 65 or 66 exam</a>Unknownnoreply@blogger.com1tag:blogger.com,1999:blog-6474024174085167013.post-15475260092650743622013-11-19T09:02:00.002-06:002013-11-19T09:05:47.200-06:00Test World vs. Real World for Series 65 and Series 66One of the most frequently heard sayings in the securities test prep industry is, "there is the test world . . . and then there is the <i>real </i>world." While it's also one of the most universally accepted truths about the Series 65 and Series 66 license exams, upon closer look, there's not much there there. In fact, after teaching this material for around 10 years now, I still cannot come up with a good example of something you learn for the Series 65 or 66 that is not also true in the so-called "real world." The fact that a candidate might know something about financial planning issues does not make an answer like "$10,000 indexed for inflation" incorrect when he or she was really looking for the more precise and up-to-date number of $14,000 for the annual gift tax exclusion. If you know the precise number for the lifetime estate credit, that does not make an answer like "$5 million indexed for inflation" wrong. In fact, it makes it a lot more workable than some precise number that goes up at some point during the year--exactly when, no one really knows.<br />
<br />
Some folks seem to take comfort in assuming that the test is stupid, stupid, stupid. However, I've taken the 65 four times and the 66 once, and I can tell you there is nothing stupid about these exams. These exams expect you to know the vocabulary terms inside out, and understand important concepts about fraud, registration, securities risk, and economics . . . all of which relate to the so-called "real world." My impression is simply that you have to study and do some critical thinking in real-time at the testing center. That's it.<br />
So, complain about the test if you must, put it down if it makes you feel better, but if you study with due diligence and avoid a meltdown at the testing center, you will pass the Series 65 or Series 66 exam. <a href="http://www.passthe65.com/">Pass your Series 65 exam</a><br />
<br />Unknownnoreply@blogger.com6tag:blogger.com,1999:blog-6474024174085167013.post-13901095216621707082013-08-27T16:05:00.000-05:002013-08-27T16:05:23.711-05:00Series 65 and Series 65 Live Online Classes Starting Soon<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgHtgs55co4BLja_-RVeP0ysIT4JU3t0zuCXMokI8DPo_INA6SDde0mHpeVp-qViiQwDYTVFzF4lnwQahGnKvoaDgS4Je9OnPDd5FH3cyvQHL7bKP1N_3-X0h1CEO90N4vGM-Ai14-_wTs/s1600/school+bus.jpg" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" height="240" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgHtgs55co4BLja_-RVeP0ysIT4JU3t0zuCXMokI8DPo_INA6SDde0mHpeVp-qViiQwDYTVFzF4lnwQahGnKvoaDgS4Je9OnPDd5FH3cyvQHL7bKP1N_3-X0h1CEO90N4vGM-Ai14-_wTs/s320/school+bus.jpg" width="320" /></a>Even though some customers are fine with the whole self-study approach to the Series 65 and Series 66 exams, we've received enough requests from those who want a live class to go ahead and launch one starting September 10th.<br />
<br />
How would you like to take in the Series 65/66 material in 90-minute online sessions that allow you to ask the author questions? Miss a session--no problem, just watch the recording when it's convenient.<br />
<br />
To get on the bus, please click this link:<br />
<a href="http://www.examzone.com/ezQuickCalendar" style="background-color: white; color: #1155cc; font-family: 'Times New Roman', serif; font-size: 13px;" target="_blank">http://www.examzone.com/<wbr></wbr>ezQuickCalendar</a><br />
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Hope to see you online . . . soon.Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-6474024174085167013.post-38352305770035353332013-06-24T14:37:00.000-05:002013-06-24T14:37:53.863-05:00What do Series 65 and Series 66 exam questions look like?<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjjhT1m-V_F8Ihe3__fgfkhAM69sAhJp78y0truv7zbiAKAglYO9dJrH8P2Lu4E_MU_QrXZ-aO-A6lBgQxyW29g8RqUZk5GY5qIvdBGedZNDm850Kw3D1ppMP97zfRHbTnh7eU9XiAmJA8/s1600/Series65Results.jpg" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" height="117" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjjhT1m-V_F8Ihe3__fgfkhAM69sAhJp78y0truv7zbiAKAglYO9dJrH8P2Lu4E_MU_QrXZ-aO-A6lBgQxyW29g8RqUZk5GY5qIvdBGedZNDm850Kw3D1ppMP97zfRHbTnh7eU9XiAmJA8/s200/Series65Results.jpg" width="200" /></a>Having taken the Series 65 exam just two days ago, I am only able to remember the topics that my particular randomly-generated batch of 130 questions brought up. I can't remember any question verbatim, and I'm not sure how much it would help, even if I could. What I can do is tell you that the following represents the kind of topic, level of difficulty, and attitude of a challenging Series 65 or Series 66 exam question:<br />
<br />
Which of the following investment advisers must indicate that it maintains custody of client assets on Form ADV Part 1?<br />
A. An adviser that receives quarterly management fees directly from the custodian with client consent<br />
B. An adviser who provides a list of unaffiliated custodial firms to its advisory clients free of charge<br />
C. An adviser that is affiliated with a bank, savings institution, or trust company<br />
D. None because advisers indicate such information on Form ADV Part 2 only as a result of Dodd-Frank<br />
<br />
Rather than provide the answer right away, let's see if any of you anonymous readers are brave enough to give your answer AND your explanation for choosing it first. Time to make this blog interactive, people.<br />
<a href="http://www.passthe66.com/">Need Help with your Exam?</a>Unknownnoreply@blogger.com5tag:blogger.com,1999:blog-6474024174085167013.post-82186490778599909952013-06-23T09:57:00.002-05:002013-06-23T09:59:38.029-05:00What is the Series 65 or Series 66 exam really like?Your Series 65 or Series 66 exam will cover many different topics in many different ways. While it's not possible to say for sure whether CAPM or Sharpe ratio will show up on your exam, we know FOR SURE that certain types of questions are all over this thing. I just took the Series 65 exam yesterday and saw around 27 questions from the Uniform Securities Act and business practices under the NASAA model rule on unethical business practices for RIAs, IARs, etc. That's a large chunk of questions, many of which look like the following:<br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjzyINLS7PSY0Jseos7geuGGEy4j5SqM43tsKhghDAcILKADduqZzDXUyt2jlupfsRc8jwr_NArlyo488EIbGShVHSqETv4fOTap64qcvxBD7bT92e28J6rYbVxYrFYOLMKBopnRmwgOLc/s1600/Series65Results.jpg" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" height="117" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjzyINLS7PSY0Jseos7geuGGEy4j5SqM43tsKhghDAcILKADduqZzDXUyt2jlupfsRc8jwr_NArlyo488EIbGShVHSqETv4fOTap64qcvxBD7bT92e28J6rYbVxYrFYOLMKBopnRmwgOLc/s200/Series65Results.jpg" width="200" /></a></div>
<br />
Which of the following statements is accurate concerning registration issues for agents under<br />
the Uniform Securities Act?<br />
<br />
A. If the individual represents the issuer of the securities involved in the transaction, he is not an agent<br />
B. If the individual represents the issuer of exempt securities, he is not an agent<br />
C. If the individual is not regularly employed by the issuer, he is not an agent<br />
D. If the individual represents the issuer in any exempt transaction, he is not an agent<br />
<br />
<br />
EXPLANATION: if the individual represents the issuer of the securities in the transaction, he MIGHT have an exemption available. But, it certainly isn't based on the fact that he represents an "issuer." An "issuer" is any person who issues or proposes to issue any security. Could be a well-known-seasoned-issuer like SBUX or just some sleazy dude sitting at the booth talking about investment opportunities in his uncle's oil and gas wells. You represent <i>that </i>guy and, trust me, there is no exemption available and also nothing good for your career up ahead. However, if the issuer is the United States Treasury, or the State of Iowa, or a bank, savings institution, or trust company, then the individual is representing the issuer of exempt securities. So, as long as the security is exempt, he's not an agent? Not quite--the Uniform Securities Act says he's exempt if we're talking about five specific types of exempt securities, not all of them. The Act says that if the transaction is exempt, he's not an agent, period. So, the answer--which many would think is B--is actually . . . <span style="font-size: xx-small;"><b>D</b></span><br />
<span style="font-size: xx-small;"><b><br /></b></span>
<span style="font-size: xx-small;"><b><a href="http://www.passthe65.com/">Need Help with your Test?</a></b></span>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-6474024174085167013.post-76936278044936314712013-03-20T13:09:00.001-05:002013-03-20T13:11:01.872-05:00Viatical Investments<div class="separator" style="clear: both; text-align: center;">
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgpm5tErJ2nRNA8sBxeEIGjFAdUg20DuGYtQ1uadvr1okX0XN1U3TFnRCQvfo-3gRw9E3Rmz56F-fofIMvfPwkPm3U8n28wg5ypGB7LVnUfAirCfaK4s5QHYl-X4TjnTonPOWivtQ-RfxI/s1600/grimreaper.jpg" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" height="240" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgpm5tErJ2nRNA8sBxeEIGjFAdUg20DuGYtQ1uadvr1okX0XN1U3TFnRCQvfo-3gRw9E3Rmz56F-fofIMvfPwkPm3U8n28wg5ypGB7LVnUfAirCfaK4s5QHYl-X4TjnTonPOWivtQ-RfxI/s320/grimreaper.jpg" width="320" /></a></div>
The exam could ask a question or two about viatical investments, so let's see what NASAA has to say about them:<br />
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This seems like the most testable points right here:<br />
It is the position of NASAA that VIATICAL INVESTMENTs, commonly known as investments in viatical, senior, or life settlement contracts, are securities and must be registered with a state securities division as required by state law. Further, those persons and/or entities selling them must be registered as required by state law.<br />
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And this also seems important:<br />
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VIATICAL INVESTMENTs, in general, may not be suitable for many investors. There are risks associated with VIATICAL INVESTMENTs that individual investors may not recognize, and which unscrupulous promoters may misrepresent or fail to disclose. Funds invested in VIATICAL INVESTMENTs are not accessible on the demand of the investor. These factors and others render this type of investment unsuitable for the financial needs and interests of the average individual investor.<br />
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What IS a "viatical investment," you ask?<br />
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Typically, a VIATICAL INVESTMENT involves the purchase by a VIATICAL INVESTOR of an interest in an insurance policy covering the life of an individual. The purchase may be for a whole or<br />
fractional interest in the policy. Some interests may be in a pool of policies insuring the lives of several people. The INSURED receives an amount of money less than the expected death benefit of the policy, while the VIATICAL INVESTOR in turn receives the right to some portion of the face amount of the policy upon the death of the INSURED. <a href="http://www.passthe65.com/">Help with Series 65 Exam</a><br />
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For the complete NASAA guide: http://www.nasaa.org/wpcontent/uploads/2011/07/12NASAA_Guidelines_Regarding_Viatical_Investments.pdf.<br />
<br />Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-6474024174085167013.post-53009658514652437602013-03-20T11:47:00.001-05:002013-03-20T12:36:25.684-05:00Series 65 and Series 66 practice questionThis one will make you think. First, it's a topic most people are not comfortable with. Second, the way it's written is intentionally confusing. Let's take a swing at it:<br />
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<span style="font-family: Times, Times New Roman, serif;">Which of the following statements is accurate?</span><br />
<span style="font-family: Times, Times New Roman, serif;">A. A security registered by coordination is registered with both the SEC and one or more state securities Administrators</span><br />
<span style="font-family: Times, Times New Roman, serif;">B. Securities registered with the states must also be registered with the SEC</span><br />
<span style="font-family: Times, Times New Roman, serif;">C. Securities registered with the SEC must also be registered with the states</span><br />
<span style="font-family: Times, Times New Roman, serif;">D. Investment company shares are registered both with the SEC and the states</span><br />
<span style="font-family: Courier New, Courier, monospace; font-size: x-small;"><br /></span>
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<span style="text-indent: -0.25in;">EXPLANATION: what you have to do with these questions is take each answer choice and try to eliminate it. Don't worry about whether you've ever seen something like this; just use what you know to see which answer choices can be eliminated to improve your odds dramatically on the "hard questions." Choice A looks pretty good, so you might have to just put it aside and keep looking for chess pieces to knock off the board. Choice B looks right at first, so you have to see if you can argue against it--can an issuer register with just a state Administrator? Yes, under qualification, when doing an intrastate offer. B is eliminated. You know that federal covered securities by definition are </span><i style="text-indent: -0.25in;">not </i><span style="text-indent: -0.25in;">registered with the states, so Choice C is eliminated. Choice D is really tempting, but before you pick it, ask yourself if a notice filing and a registration are the same thing? Not sure--look at Choice A again. If my company offers shares in several states, we have to register with the SEC under the Securities Act of 1933, and if we're not federal covered, we will also register with the states, and we will use registration by coordination. So, I see nothing wrong with Choice A, while Choice D is over-stating what a notice filing is--it is </span><i style="text-indent: -0.25in;">not </i><span style="text-indent: -0.25in;">a registration but merely a filing of notice. The answer is Choice A. And, if you're willing to think through questions in this way, you will arrive at answers that you </span><i style="text-indent: -0.25in;">know </i><span style="text-indent: -0.25in;">are correct. Trust me, that helps you focus on the next question on your screen. <a href="http://www.passthe66.com/exams.htm">Get Series 66 Questions Here</a></span></div>
Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-6474024174085167013.post-69512726416993832382013-02-01T15:42:00.003-06:002013-02-01T15:43:33.138-06:00Updated Series 65 and Series 66 MaterialsJust a quick word on how we keep our series 65 and series 66 exam materials current/up-to-date:<br />
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<ol>
<li>Pass the 65 and Pass the 66 ExamCram Online Test Prep updated throughout the year, as-needed.</li>
<li>Pass the 65 and Pass the 66 textbooks updated each year.</li>
<li>Pass the 65 and 66 DVD for 2013 will be released in the next two weeks.</li>
<li>Pass the 65 and 66 audio CD lectures were just updated for 2013.</li>
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