In a JTWROS account, which action generally requires the signatures (or authorization) of all tenants?

Having the firm issue a check payable to the account owners

Entering a sell order for securities held in the joint account

A corporation wishes to open a margin account. In addition to the corporate resolution, the firm needs:

The charter or bylaws authorizing margin trading

Personal tax returns for each officer named in the resolution

A firm learns that a customer holding an individual account has died. Its FIRST action should be to:

Cancel open orders and freeze the account

Transfer the assets to the spouse

Close the account and mail a check to the last address

A customer gives a registered rep written discretionary authority. Before the first discretionary order, the account must be:

Approved in writing by a principal

Reported to FINRA on a discretionary account form

A customer phones and says: 'Buy 500 shares of XYZ today at whatever price you think is best.' Without written discretion, the rep may:

Accept it as time-and-price authority, good for that day only

Decline, because the order requires written discretionary authority

Accept it, but only as a GTC order

Accept it and choose a different stock if XYZ rises

A trustee wants to open an account for a trust. The firm should obtain:

The trust agreement or a certification of trust

Signed consent forms from every trust beneficiary

Which person generally may NOT open a securities account in his or her own name without a custodian?

A 17-year-old high school student

A 30-year-old self-employed consultant

Series 7: F2: Opens Accounts / Evaluates Customer Profile

Function 2 is 9% of the Series 7 (11 questions): account types and registrations, retirement accounts, customer identification, the investment profile and account approvals..

Updated 2026-09-23 · 3 sources · By the SeriesPrepKit team

Exam weight

Scored questions

Exam

Series 7

Outline

FINRA 2025

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Where it sits in the outline

Official outline section: F2: Opens Accounts / Evaluates Customer Profile, 9% of the Series 7 (11 of 125 scored questions), per FINRA - Series 7 Content Outline (2025).

Function 2 is 9% of the Series 7 (11 questions): account types and registrations, retirement accounts, customer identification, the investment profile and account approvals.

Key concepts

Registrations. Individual, joint (JTWROS or TIC), community property, trusts, estates, partnerships, corporate and custodial accounts, each with its own documentation (trust agreement, corporate resolution, letters testamentary).

Retirement. Traditional vs. Roth IRAs; rollovers (60-day window) vs. direct transfers; employer plans (401(k), 403(b), 457, defined benefit) and ERISA.

Customer profile. Age, other holdings, financial situation, tax status, objectives, experience, time horizon, liquidity needs and risk tolerance under FINRA Rule 2111 and Reg BI.

Authorizations. Power of attorney, third-party trading authorization and discretionary authority (written, and approved by a principal).

Worked example

Rollover vs. transfer

A client leaves a job with $80,000 in a 401(k). In a direct rollover the plan sends the money straight to the new IRA custodian; nothing is withheld. If the client takes a check instead, the plan withholds 20% ($16,000), and the client has 60 days to deposit the full $80,000, making up the withheld $16,000 from other funds, to avoid tax on it.

Common traps

Reg BI covers recommendations of account type (for example, a rollover into a fee-based account), not just securities.
Time and price discretion only (same day) is not full discretionary authority.

Practice questions on this topic

Series 7 practice questions: Opens Accounts / Evaluates Customer Profile

Two siblings open a joint account as tenants in common with 70/30 ownership. If the sibling owning 70% dies, that 70% interest:

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Frequently asked questions

How much of the Series 7 is opens accounts / evaluates customer profile?

Official outline section: F2: Opens Accounts / Evaluates Customer Profile, 9% of the Series 7 (11 of 125 scored questions), per FINRA - Series 7 Content Outline (2025).

Sources

FINRA - Series 7 Content Outline (2025) (accessed 2026-09-23)
FINRA Rule 2111 - Suitability (accessed 2026-09-23)
SEC - Regulation Best Interest (accessed 2026-09-23)

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