Final answer:
An investment adviser can send account statements directly to clients if they are qualified to have custody of client funds, not just because they are registered with the SEC or are a member of a FINRA-registered broker-dealer.
Step-by-step explanation:
According to the North American Securities Administrators Association (NASAA) Custody Requirements for Investment Advisers Model Rule, an investment adviser (IA) that intends to send account statements directly to its clients is permitted to do so if the investment adviser is qualified to have custody of client funds or securities. Being registered with the SEC or being a member of a FINRA-registered broker-dealer is not sufficient on its own to meet the custody requirements. Instead, they must satisfy the custody rule which usually requires an independent verification process such as an annual audit by an independent public accountant to confirm the propriety of client funds and account statements.