Question

Howie is both a registered investment adviser and a licensed real estate agent. He recently prepared a financial plan for Bob. In this plan, Howie recommended that Bob increase his life insurance coverage and also consider putting a portion of his portfolio in hard assets, such as real estate. Howie knew of a property called Blackacre that was currently for sale and told Bob about it. Bob eventually purchased Blackacre using Howie as his real estate agent and Howie received a commission for the purchase. Would Howie's commission for selling Blackacre be considered compensation under the Investment Advisers Act?

a. Yes, but only if Howie did not fully disclose that he was receiving a commission from the sale of Blackacre
b. No, since the commission was not connected with the purchase or sale of a security
c. No, real estate transactions are governed by state regulation
d. Yes, Howie's commission for Blackacre would be considered part of his compensation as an investment adviser

Answer 1

No, the commission for selling Blackacre would not be considered compensation under the Investment Advisers Act.

Step-by-step explanation:

No, since the commission was not connected with the purchase or sale of a security. Real estate transactions are not governed by the Investment Advisers Act, as they fall within the jurisdiction of state regulation. Howie's commission for selling the property, Blackacre, would not be considered compensation under the Investment Advisers Act.