Series 26 case studies
Series 26 · Put your knowledge to work in context.
The Series 26 - Investment Company and Variable Contracts Products Principal qualification exam is a FINRA principal-level credential for people who supervise, rather than simply sell, investment company and variable contracts business. It sits inside FINRA's qualification exam framework, alongside the entry-level exams such as the Securities Industry Essentials (SIE) and the Series 7, and it is aimed at supervisory personnel, registered principals, and compliance staff at member firms whose representatives distribute mutual funds, other investment company products, and variable contracts. The Series 26 case studies are 5 cases and about 3,111 words.
1The $540 Breakpoint the Ticket Says the Client Declined
During Tuesday's trade-blotter review you find that on Monday a registered representative entered a 24,000 purchase of Class A shares of the Ridgeway Growth Fund for Margaret Osei, age 58, in a new individual account. Your fund family's Class A schedule is 5.75% on purchases under 50,000, 4.50% from 50,000 to 99,999, and 3.50% at 100,000 and above.
579 words, about 3 min2The A-to-C Exchange in a 24-Year IRA
A representative submits an exchange for your approval: 60,000 of Class A shares of the Halden Balanced Fund held in a client's Roth IRA for four years, exchanged into Class C shares of the same fund. The ticket reads "client wants to avoid sales charges." The client is 41, maximizes IRA contributions every year, has a 24-year horizon, and has told the rep she does not need the money.
556 words, about 3 min3A 1035 Exchange at Age 76 With a New Seven-Year Surrender Schedule
On Monday a representative submits a 1035 exchange for approval. Client Harold N., 76 and married, would move $210,000 from a nine-year-old variable annuity with Carrier A, where the surrender charge has expired, the contract value equals the death benefit, mortality and expense charges are 1.10%, and a guaranteed minimum income benefit rider costs 0.60%.
682 words, about 3 min4The Seminar Postcard the Branch Manager Approved Himself
A producing branch manager who is also a registered principal wants to mail 5,000 postcards for a steak-dinner seminar on a variable annuity. The reverse side charts the S&P 500 against the contract's indexed credits for 2019-2023 with the line "our clients earned 7% while the market lost 12%," and gives the manager's cell number.
594 words, about 3 min5The Branch With Six Outside Checks and an Unregistered Order-Taker
During an unannounced inspection of a single-rep OSJ branch you find: the branch manager, a producing registered principal, approved his own variable annuity exchange last month and his own seminar flyer; his sales assistant, who is not registered, accepts fund purchase instructions by phone when the manager is out and initials the order tickets; a stack of brochures for "XYZ Senior Secured Notes" bearing the manager's business card; six client checks totaling 140,000 payable to "XYZ Holdings LLC"; and a Form U4 for the manager that discloses no outside business activity. The assistant says the checks are "just deposits for the notes" and that clients have received 8% annually for two years.
700 words, about 4 min