What identifies an account as a Non-Client account?

• A. Accounts owned by outside investors
• B. Accounts where family members of employees reside
• C. Accounts managed by external funds
• D. All broker accounts

Answer: (B)

An account is identified as a Non-Client account if it involves situations where family members of employees reside. This designation highlights that the account is not actively serviced or managed with a typical client relationship in mind. It raises potential conflicts of interest and does not represent a regular client relationship, which typically involves an advisor providing services to the account holder.

In this context, it is important to note that accounts owned by outside investors or managed by external funds would still have a legitimate client-advisor relationship. These accounts are generally recognized within regulatory frameworks since they involve transactions and investments made on behalf of individuals or entities who are external clients. Similarly, while broker accounts may have various categorizations, they can encompass both client and non-client relationships depending on specific factors such as the nature of the account holders. Therefore, they don't inherently signify a Non-Client status without additional context.