July Study Question of the Month

Submit your answer to info@solomonexamprep.com to be entered to win a $10 Starbucks gift card. Continue reading

Submit your answer to info@solomonexamprep.com to be entered to win a $10 Starbucks gift card.

Question
Relevant to the Series 6, Series 7, Series 65, Series 66

 

 

 

 

 

Which of the following is true of UGMA/UTMA accounts?

I. Only family members may contribute to a UGMA/UTMA
II. Annual contribution limit of $13,000 per year, per child
III. Assets may only be used for education expenses
IV. Earnings reported under adult custodian’s tax identification

A. I and II
B. III and IV
C. II and III
D. None of the choices listed

The Clock Is Ticking: Series 50 Deadline is September 12, 2017

If you are a municipal advisor representative and have not yet passed the Series 50 exam, time is running out. As of this writing, you have 78 days until the September 12 deadline. After that, you will not be able to engage in municipal advisory activities until you have a Series 50 license. Continue reading

If you are a municipal advisor representative and have not yet passed the Series 50 exam, time is running out. As of this writing, you have 78 days until the September 12 deadline. After that, you will not be able to engage in municipal advisory activities until you have a Series 50 license.

A municipal advisor is any firm that provides advice to, or on behalf of, municipal entities or an obligated person, and a municipal advisor representative is an individual who works on the municipal advisor’s behalf.

According to Lynette Kelly, executive director of the MSRB, in The Bond Buyer, “after September 12, any firm that doesn’t have an individual qualified [as a municipal advisor representative] cannot represent that they can engage in municipal advisory activities.” In other words, you can’t do the work without the license.

The MSRB released the 110-question permanent Series 50 exam September 12, 2016, allowing municipal advisor representatives a one-year grace period to pass the test and get a Series 50 license.

If you fail the Series 50 exam, you must wait 30 days before taking it again. If you fail three times in a row, you must wait 180 days before retaking it.

Need help? The Solomon Exam Prep pass rate for the Series 50 exam is 94.29%. Click here for more information, or give us a call at 503-601-0212 for more information!

June Study Question of the Month

*Submit your answer to info@solomonexamprep.com to be entered to win a $10 Starbucks gift card.* Continue reading

Congratulations to Veronika J., this month’s Study Question of the Month winner!

***Submit your answer to info@solomonexamprep.com to be entered to win a $10 Starbucks gift card.***

Question (Relevant to the Series 6, Series 7, Series 65, Series 66)

In her junior year in college, Kim’s grandmother dies and leaves Kim several thousand dollars. Kim wants to put some of the money she received from her grandmother into a retirement account. Given Kim’s young age and status as a full-time college student, what would be her best option?

A. Traditional IRA
B. Roth IRA
C. SIMPLE IRA
D. None of the choices listed

Answer: D. You can only contribute earned income to an IRA or tax-deferred retirement plan and so unless Kim has earned income, she cannot contribute to a tax-deferred retirement plan. A SIMPLE IRA, which stands for Savings Incentive Match Plan for Employees, is an employer-sponsored retirement plan and not available to individuals.

No More Delays: DOL Moves Forward with Fiduciary Rule

Like a groom who finally ran out of excuses, Labor Department secretary Alexander Acosta announced on Monday, May 22, 2017, that the DOL would no longer seek to delay implementation of the Obama-era fiduciary rule. Continue reading

Like a groom who finally ran out of excuses, Labor Department secretary Alexander Acosta announced on Monday, May 22, 2017, that the DOL would no longer seek to delay implementation of the Obama-era fiduciary rule. The rule goes into effect on June 9, 2017.

The fiduciary rule requires financial professionals to put an investor’s interests first—that is, to meet a fiduciary duty—when providing investment advice regarding virtually any retirement plan.

In the past, financial professionals only had to demonstrate that an investment was suitable, which allowed bad actors to recommend expensive investments with high commissions that diminished investors’ retirement savings over time. This is known as conflicted advice, and the Obama White House estimated that it costs investors $17 billion a year.

When the rule was submitted for public comment, the vast majority of commenters were in favor of the proposed regulation.

Opponents of the rule, including the Trump administration, believe that implementation of the rule will raise costs and limit choices for investors.

Secretary Acosta stated that, although the rule will no longer be delayed, the Trump administration “presumes that Americans can be trusted to decide for themselves what is best for them,” indicating that the rule could possibly be repealed or rewritten in the future.

However, those who defend the fiduciary rule claim that average investors, faced with confusing industry jargon, cannot always make the best investment choices for themselves and will benefit from the protection that the rule provides.

The Department of Labor’s fiduciary rule goes into effect on June 9, 2017, but it will not be enforced until January 1, 2018, so firms have until the end of the year to fully implement the required changes.

Once the fiduciary rule is in effect, it will mean more openings for people who have passed the Series 65 or Series 66 exam, which means that now is the perfect time to start studying. Visit Solomon Exam Prep today for more information about our study materials!

May Study Question of the Month

***Submit your answer to info@solomonexamprep.com to be entered to win a $10 Starbucks gift card.*** Continue reading

Congratulations to Diane K., this month’s Study Question of the Month winner! 

See the answer below!

***Submit your answer to info@solomonexamprep.com to be entered to win a $10 Starbucks gift card.***

Question (Relevant to the Series 7, Series 52, Series 65, Series 66, Series 79)

When the yield curve inverts, that is, when short-term interest rates are higher than long-term interest rates, all of the following are true EXCEPT: 

A. It indicates low or no inflation expectations.

B. It indicates higher demand for long-term bonds and lower demand for short-term bonds.

C. It indicates an economic recession.

D. It indicates an economic expansion.

Answer: D. A yield curve plots the yields of similar bonds based on the term of the bond (maturity) and the yield of the bonds, with term on the x-axis and yield on the y-axis.  A normal yield curve is upward sloping, indicating that the longer the term of the bond, the higher yield (interest rate).  This is because in normal economic conditions, the longer the term of the investment, the greater the risk that interest rates or the economy will change. Thus investors require greater compensation for uncertainties and risks associated with committing their money for longer time periods. This is called the risk premium.  When the yield curve is inverted, however, it slopes downward instead of upward. This means that there is higher demand for long-term bonds compared to short-term bonds because investors believe that interest rates will fall in the future.  Also, it means that investors are not concerned about inflation. These conditions are associated with a future economic recession.