General Securities Sales Supervisor (Series10) Practice Exam

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When opening a 529 Plan, what must be provided to the customer aside from a new account form?

A Official Statement and risk disclosure document
B Prospectus for underlying mutual fund and risk disclosure document
C Official Statement and prospectus for underlying mutual fund
D Risk Disclosures only

The correct answer is: C Official Statement and prospectus for underlying mutual fund

When a customer opens a 529 Plan, it is essential to provide them with both an Official Statement and a prospectus for the underlying mutual fund. The Official Statement outlines important details about the 529 Plan, including its features, fees, and investment options, ensuring that the investor has a comprehensive understanding of the plan they are enrolling in. Meanwhile, the prospectus provides specific information on the mutual fund's investment strategy, portfolio, performance, and associated risks. This combined information is crucial in helping the customer make an informed decision and understand the implications of their investment. By ensuring that both documents are provided, the financial professional adheres to regulatory requirements and emphasizes the importance of full disclosure. It's about equipping the customer with all necessary information to make educated, confident financial decisions with their educational investments.