Part IV

Playing Nicely: Serving Your Customers and Following the Rules


In this part . . .

For the Series 7 exam (and in your real-life career as a stockbroker), you’re required to know the market conditions that affect your customers’ portfolios and the rules that regulate your responsibilities when you’re opening, closing, transferring, and handling your customers’ accounts. Then, for the times when your customers’ portfolios skyrocket in value (thanks to your expertise and brilliant recommendations, of course), the Series 7 tests you on your understanding of the tax breaks available so your customers can keep more of the money you helped them earn instead of giving it away to Uncle Sam.

In this part, I detail the tools you have at your disposal — not just to scrutinize customers’ accounts but also to monitor market conditions that can affect their investments. I also familiarize you with the markets where securities trade. And in addition to giving you an overview of income tax breaks and helping you distinguish long-term from short-term capital gains and losses for income tax purposes, I discuss the effect of retirement plans and contribution limits on your customers’ income taxes. Finally, I review the essential rules for care and protection of your customers’ accounts, and I talk a bit about the agencies that make sure you play by the rules.

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