Although the regulations permit a number of different methods of investment adviser compensation, it would not be considered proper for an IA to:
A) charge an annual fee equal to 1% of the first $250,000 in assets under management and 1/2% for all assets above that amount.
B) tell clients that the fee will be 5% of the profits that exceed a stated benchmark, but nothing if the benchmark is not reached.
C) charge $2,500 for developing a financial plan for a client.
D) charge an annual fee equal to 1% of assets under management.
Answer: B