Question

The administrator may require an IA to file a document stating the ____ along with its initial ADV.

A) Business plan
B) Investment strategy
C) Consent to audits
D) Basis for fees

Answer 1

An administrator may require an Investment Adviser to file a document stating the basis for fees along with its initial ADV, to ensure transparency in how the adviser will charge clients.

Step-by-step explanation:

The student's question pertains to the requirements that an Investment Adviser (IA) must fulfill when registering with an administrator, under the context of securities regulation. When an IA files its initial Form ADV and begins the registration process, the administrator may require the IA to file a document stating the basis for fees along with its initial ADV. This information is crucial because it outlines the way in which the IA will charge clients for its services, ensuring transparency and allowing clients to make informed decisions when choosing an adviser.