Series 65 Quiz: Apply Erisa Fiduciary Standards

What this quiz covers

This quiz focuses on Apply Erisa Fiduciary Standards, giving you a quick way to practice the rules, question types, and explanations that matter most for Series 65.

How to use this quiz

Try each quiz question before looking at the correct answer. Use the explanations to review missed ideas, then come back to similar questions until the pattern feels familiar.

Question 1

1. Automatic IRS approval if the price seemed reasonable
2. Excise taxes and possible fiduciary personal liability (correct answer)
3. No issue because the plan received an asset
4. Only a requirement to update the summary plan description

Question 2

1. No consequence if the lease was disclosed to employees
2. Only a requirement to file a new plan adoption agreement
3. Automatic exemption because real estate is a diversifier
4. Excise taxes and fiduciary liability for losses (correct answer)

Question 3

1. Sending required QDIA notices to eligible employees
2. Mapping a closed fund into a similar lower-fee fund
3. Using plan assets to pay a fiduciary's personal legal bill (correct answer)
4. Benchmarking recordkeeping fees against peers

Question 4

1. Duty to guarantee liquidity at all times
2. Duty to follow the adviser's business plan
3. Duty to avoid diversification
4. Duty of loyalty to participants (correct answer)

Question 5

1. Duty to concentrate assets for higher returns
2. Duty to maximize employer profit
3. Duty of loyalty and conflict avoidance (correct answer)
4. Duty to follow participant preferences only

Question 6

1. Advice followed FINRA rules instead of ERISA
2. Advice could ignore fees if returns were high
3. Advice required only participant signatures
4. Advice required a prudent process and reasonable expenses (correct answer)

Question 7

1. It allowed any single-stock default investment
2. It removed the duty to monitor the fund
3. It ensured participants never lose principal
4. It reduced fiduciary exposure for default investments (correct answer)

Question 8

1. Hiring an unrelated TPA at market rates
2. Using plan assets to pay the employer's legal bills (correct answer)
3. Adding a low-cost bond index fund
4. Sending QDIA notices before enrollment

Question 9

1. Guaranteed protection from all ERISA claims
2. No need to diversify plan investments
3. Ability to default participants into cash indefinitely
4. Fiduciary relief for defaults if notice and rules met (correct answer)

Question 10

1. Duty to guarantee plan funding levels
2. Duty to concentrate investments for simplicity
3. Duty to follow state blue-sky registration rules
4. Duty of loyalty to act solely for participants (correct answer)

Question 11

1. Benchmarking investment fees against peers
2. Accepting a personal kickback from a plan vendor (correct answer)
3. Defaulting non-electing employees into a QDIA
4. Offering both index and active options

Question 12

1. Advice required only minimal disclosure, not process
2. Advice could be based on employer stock promotion
3. Advice focused on best interest, not employer convenience (correct answer)
4. Advice was optional if the plan used a QDIA

Question 13

1. Automatic protection because it helped the company
2. Excise taxes, correction, and potential personal liability (correct answer)
3. No issue if participants held diversified funds too
4. Only a requirement to amend the investment policy statement

Question 14

1. Duty to follow SEC custody rules only
2. Duty to avoid all active management
3. Duty of loyalty and acting solely for participants (correct answer)
4. Duty to keep all assets in cash equivalents

Question 15

1. It allowed the employer to select any stock as default
2. It prevented participants from ever changing investments
3. It reduced fiduciary liability for defaulted investments if requirements were met (correct answer)
4. It removed the need to monitor the default investment

Question 16

1. No consequence if disclosure occurred after the fact
2. The transaction became valid after board approval
3. Only participants, not regulators, could object
4. Fiduciary may owe repayment and face civil penalties (correct answer)

Question 17

1. No issue if the owner was also a participant
2. Automatic qualification as a QDIA correction
3. Potential excise taxes and fiduciary repayment obligations (correct answer)
4. Only disclosure to employees was required

Question 18

1. It allowed defaulting into any employer-selected stock
2. It required participants to remain in the default forever
3. It created fiduciary safe-harbor protection for defaults (correct answer)
4. It eliminated the need to provide fee disclosures

Question 19

1. No consequence if the company intended to repay later
2. Excise taxes and requirement to correct the transaction (correct answer)
3. Only a need to notify participants after year-end
4. Automatic exemption because it benefited employees indirectly

Question 20

1. Advice followed only employer directives, not participants
2. Advice required only that investments be popular
3. Advice required prudence, documentation, and conflict management (correct answer)
4. Advice was exempt because participants chose investments