Investment Company and Variable Contracts Products Representative (Series 6)Practice Exam

What is the term used to identify an RR's employer?

1. Broker-Dealer

2. Investment Advisor

3. Underwriter

4. Financial Planner

The correct answer is: Broker-Dealer

The term used to identify a registered representative's employer is "Broker-Dealer." Broker-dealers are firms that are involved in buying and selling securities on behalf of their clients and themselves. They play a crucial role in the financial markets, acting as intermediaries between buyers and sellers of securities. These firms employ registered representatives, who are licensed individuals that help customers with transactions and provide investment advice. The relationship between the registered representative and the broker-dealer is foundational because the broker-dealer provides the necessary infrastructure, compliance framework, and support for the representative's business activities. Other options like Investment Advisor, Underwriter, and Financial Planner refer to different roles or functions within the financial industry, which do not encompass the concept of an employer for a registered representative. An investment advisor typically provides investment advice and manages portfolios but is not necessarily the employer of a registered representative. An underwriter is involved in the issuance of securities and pricing them but again does not function as an employer for representatives. A financial planner focuses on financial planning for individuals but operates independently or may work under various kinds of firms, rather than specifically as an employer of registered representatives.