Challenge Your Exam Readiness With Our Free Series 65 License Practice Questions

NASAA and the Uniform Securities Act prohibit advisers from commingling client assets with their own funds. Doing so compromises asset protection and creates conflicts of interest, as client money could be used for business expenses or exposed to creditor claims. Option A can be permissible if the client meets specific net worth or asset thresholds defined by regulation. Option C may raise suitability concerns, but if full and fair disclosure is made, it is not automatically unethical. Option D describes a practice allowed under Section 28(e), provided the soft dollars are used for eligible research or brokerage services. The Series 65 exam emphasizes fiduciary duty: advisers must segregate client funds, provide accurate records, and protect assets through qualified custodians. Violating this rule may result in administrative action, fines, or license suspension. Thus, commingling is unequivocally considered an unethical practice.