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SIE customer accounts practice questions

Free SIE exam questions on customer accounts: opening an account, suitability and Reg BI, joint and custodial accounts, cash vs margin, discretion, IRAs and employer plans, with rationales.

Tap an answer to check it, or open "Show the answer and rationale" under each question. Customers in the questions are fictional. Exam practice only, not investment advice.

Question 1 of 20

Which FINRA rule requires firms to use reasonable diligence to know the essential facts about every customer?

  1. Rule 3210, outside accounts
  2. Rule 2090, Know Your Customer
  3. Rule 4530, reporting requirements
  4. Rule 2111, suitability
Show the answer and rationale

Answer: B

Rule 2090 is the know-your-customer rule and applies at account opening and throughout the relationship. Rule 2111 governs recommendations, 3210 covers employee accounts at other firms, and 4530 covers reportable events.

📚 Learn it: Opening an Account: Know Who You Are Serving

Question 2 of 20

An explicit recommendation to hold a stock is treated under FINRA Rule 2111 as:

  1. A recommendation covered by suitability
  2. Discretionary trading
  3. Not a recommendation at all
  4. An unsolicited order
Show the answer and rationale

Answer: A

FINRA's suitability rule reads 'investment strategy' broadly and includes an explicit recommendation to hold a security. Because the customer relies on that advice, the hold must be suitable too.

📚 Learn it: Suitability, Reg BI and Form CRS

Question 3 of 20

What is the main benefit of a transfer on death (TOD) registration?

  1. A named beneficiary skips probate
  2. The account becomes a joint account
  3. The beneficiary may trade the account during the owner's life
  4. The account is exempt from estate tax
Show the answer and rationale

Answer: A

A TOD registration names a beneficiary who receives the assets at the owner's death, avoiding probate. The beneficiary has no rights while the owner lives, and TOD does not by itself remove estate tax.

📚 Learn it: Individual and Joint Accounts: Who Gets It When Someone Dies

Question 4 of 20

Who has authority to trade in an estate account?

  1. The deceased's oldest child
  2. The deceased's trusted contact
  3. Any named beneficiary
  4. The executor or administrator
Show the answer and rationale

Answer: D

The court-appointed executor (or administrator if there is no will) acts for the estate, shown by court documents such as letters testamentary. Beneficiaries, relatives and trusted contacts have no trading authority.

📚 Learn it: Custodial, Trust and Entity Accounts

Question 5 of 20

Which agreement in a margin account pledges the customer's securities as collateral for the loan?

  1. Hypothecation agreement
  2. Credit agreement
  3. Trading authorization
  4. Loan consent
Show the answer and rationale

Answer: A

Hypothecation means pledging securities as collateral, and the hypothecation agreement is required for a margin account. The credit agreement sets loan terms; the loan consent lets the firm lend out securities.

📚 Learn it: Cash, Margin and Who Decides the Trade

Question 6 of 20

Which statement about traditional IRA contributions is accurate?

  1. They are deductible only after age 59½
  2. They may be deductible, based on income
  3. They are never deductible
  4. They are always fully deductible
Show the answer and rationale

Answer: B

Traditional IRA contributions are deductible, fully or partly, depending on income and whether the saver (or spouse) is covered by a workplace plan. Roth contributions are never deductible; age does not control deductibility.

📚 Learn it: Traditional and Roth IRAs (Tax Year 2026)

Question 7 of 20

Which retirement plan is typically offered by a state or local government to its employees?

  1. Keogh plan
  2. 457(b) plan
  3. 403(b) plan
  4. SIMPLE IRA
Show the answer and rationale

Answer: B

457(b) plans are deferred compensation plans for state and local governments (and some tax-exempt organizations). 403(b) plans serve public schools and 501(c)(3) groups; SIMPLE and Keogh plans serve small businesses and the self-employed.

📚 Learn it: Employer Plans: 401(k), 403(b), 457, SEP and SIMPLE

Question 8 of 20

Which statement about federal tax on 529 plan contributions is accurate?

  1. They are fully deductible federally
  2. They are not deductible on the federal return
  3. They are deductible up to $2,000
  4. They are deductible only for grandparents who give to grandchildren
Show the answer and rationale

Answer: B

The IRS says you cannot deduct 529 contributions on your federal return; the benefit is tax-free growth and tax-free qualified withdrawals. Some states offer their own deductions.

📚 Learn it: Education Savings and Special Situations

Question 9 of 20

What does Rule 2090's 'essential facts' include?

  1. Facts needed to service the account
  2. Facts about the customer's neighbors
  3. Only the customer's tax filing status
  4. The customer's political affiliation
Show the answer and rationale

Answer: A

FINRA describes essential facts as those needed to service the account effectively, understand the authority of anyone acting for the customer, and comply with laws and rules. Political views and neighbors are irrelevant; tax status alone is too narrow.

📚 Learn it: Opening an Account: Know Who You Are Serving

Question 10 of 20

What is the maximum length of a stand-alone broker-dealer's Form CRS in paper format?

  1. One page
  2. Four pages
  3. Two pages
  4. Ten pages
Show the answer and rationale

Answer: C

A broker-dealer or an investment adviser has a two-page limit. A dual registrant that combines brokerage and advisory services in one relationship summary gets four pages.

📚 Learn it: Suitability, Reg BI and Form CRS

Practice 10 more customer accounts questions free →

A timed or tutor-mode set in the app, scored by SIE section, with every miss saved for review. Free, no sign-up needed.

Question 11 of 20

A JTWROS account is owned by a husband and wife. The husband dies. What does the firm need to re-register the account to the wife?

  1. A court order from probate
  2. A death certificate and firm forms
  3. The husband's will and testament
  4. Consent from the couple's children
Show the answer and rationale

Answer: B

Because JTWROS assets pass by survivorship outside probate, the survivor generally provides a certified death certificate and the firm's required documents. Probate orders, wills and children's consent are not needed for survivorship.

📚 Learn it: Individual and Joint Accounts: Who Gets It When Someone Dies

Question 12 of 20

The custodian of a UTMA account dies. What usually happens?

  1. The minor gets control immediately
  2. A successor custodian is appointed
  3. The account is closed and liquidated
  4. The donor takes the assets back
Show the answer and rationale

Answer: B

A successor custodian, named under the account or appointed under state law or by a court, steps in. The gift stays irrevocable, so the donor cannot reclaim it, and the minor gets control only at the state's age of termination.

📚 Learn it: Custodial, Trust and Entity Accounts

Question 13 of 20

Which order requires the rep to have written discretionary authority?

  1. 'Buy 100 XYZ at the best price today'
  2. 'Sell my 50 ABC when you think best today'
  3. 'Buy whichever tech stock you like'
  4. 'Buy 200 DEF at $40 or lower'
Show the answer and rationale

Answer: C

Choosing the security (asset) is discretion and needs prior written authorization. When the customer names the asset, action and amount, choosing only time or price is not discretion.

📚 Learn it: Cash, Margin and Who Decides the Trade

Question 14 of 20

Which event is an exception to the 10% early withdrawal tax for IRAs but has a $10,000 lifetime cap?

  1. Death of the owner
  2. A first-time home purchase
  3. Total disability
  4. Qualified higher education
Show the answer and rationale

Answer: B

The first-time homebuyer exception is capped at $10,000 over the owner's lifetime. Higher education, death and disability exceptions have no such fixed dollar cap.

📚 Learn it: Traditional and Roth IRAs (Tax Year 2026)

Question 15 of 20

A 401(k) participant aged 40 asks how to move her balance to an IRA without any tax withheld. What method fits?

  1. A direct rollover to the IRA
  2. A loan from the plan
  3. A check payable to her
  4. A hardship withdrawal
Show the answer and rationale

Answer: A

A direct rollover sends the money from the plan to the IRA, so no 20% withholding applies. A check payable to her triggers withholding; hardship withdrawals and loans are not rollovers.

📚 Learn it: Employer Plans: 401(k), 403(b), 457, SEP and SIMPLE

Question 16 of 20

Under FINRA Rule 2165, which customer is a specified adult?

  1. A pension fund whose members are all retired
  2. A 45-year-old impaired and unable to self-protect
  3. A 50-year-old in good health
  4. A 17-year-old custodial beneficiary
Show the answer and rationale

Answer: B

A specified adult is a natural person 65 or older, or 18 or older whom the firm reasonably believes has a mental or physical impairment that prevents protecting their own interests. Entities and healthy adults under 65 do not qualify.

📚 Learn it: Education Savings and Special Situations

Question 17 of 20

A trusted contact person named on an account can do which of the following?

  1. Withdraw funds in an emergency
  2. Be contacted by the firm in some cases
  3. Change the account's beneficiary
  4. Place trades in the customer's account
Show the answer and rationale

Answer: B

A trusted contact is a resource the firm may contact; that person has no authority to trade, withdraw or change the account. Authority to act requires a separate power of attorney or similar document.

📚 Learn it: Opening an Account: Know Who You Are Serving

Question 18 of 20

Under Reg BI's Disclosure Obligation, which fact must be disclosed to a retail customer?

  1. The rep's home address
  2. The firm's quarterly earnings
  3. Other customers' holdings
  4. The capacity in which the firm is acting
Show the answer and rationale

Answer: D

The Disclosure Obligation covers material facts about the relationship, including capacity (broker), fees and costs, the type and scope of services, and conflicts. Personal addresses, earnings and other customers' data are not required and some would be private.

📚 Learn it: Suitability, Reg BI and Form CRS

Question 19 of 20

Account statements for a joint account may be mailed to which address?

  1. An address the owners designate
  2. Each owner's employer
  3. The firm's branch office only
  4. The trusted contact's home
Show the answer and rationale

Answer: A

Joint owners designate the mailing address for statements and confirmations. Sending them to employers, a branch office or a trusted contact without instructions is not the standard practice.

📚 Learn it: Individual and Joint Accounts: Who Gets It When Someone Dies

Question 20 of 20

Which feature distinguishes UTMA from UGMA accounts?

  1. UTMA allows margin trading
  2. UTMA allows two minors per account
  3. UTMA gifts may be revoked
  4. UTMA can hold a wider range of property
Show the answer and rationale

Answer: D

The Uniform Transfers to Minors Act allows a wider range of property, such as real estate, than the older Uniform Gifts to Minors Act. Both allow one minor, are irrevocable and prohibit margin.

📚 Learn it: Custodial, Trust and Entity Accounts

Practice 10 more customer accounts questions free →

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