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

Who is primarily responsible for reviewing advertisements for mutual funds?

1. A compliance officer

2. Fund shareholders

3. Investment advisors

4. An independent auditor

The correct answer is: A compliance officer

The primary responsibility for reviewing advertisements for mutual funds falls on the compliance officer. This role is crucial because compliance officers ensure that all marketing materials adhere to regulatory standards set forth by organizations such as the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA). They assess whether the advertisements represent the mutual fund accurately, do not mislead investors, and comply with specific rules related to disclosure and performance claims. The other roles mentioned, such as fund shareholders, investment advisors, and independent auditors, have different responsibilities. Shareholders are mainly concerned with their investments and do not typically evaluate advertisements. Investment advisors provide guidance to clients about which funds to invest in but are not directly responsible for overseeing marketing compliance. Independent auditors ensure the financial statements of the fund are accurate but do not review advertisements in terms of regulatory compliance or marketing practices. Therefore, the compliance officer plays a pivotal role in safeguarding against misleading information in mutual fund advertisements.