Matt, a registered investment adviser, operates an office down the hall from Jane, a CPA. Because Jane has no interest in portfolio management, she frequently refers her clients to Matt for investment advice. When one of Jane's client signs a letter of engagement with Matt, Matt sends Jane a $200 referral fee. This occurred 5 times in the previous year. This situation is

permitted when the referral fee has been disclosed to appropriate clients.

Explanation:

From the question, we are informed that Matt, a registered investment adviser, operates an office down the hall from Jane, a CPA. We are further told that because Jane has no interest in portfolio management, she frequently refers her clients to Matt for investment advice.

When one of Jane's client signs a letter of engagement with Matt, Matt sends Jane a $200 referral fee and this occurred 5 times in the previous year.

Based on the above scenario, permitted when the referral fee has been disclosed to appropriate clients. Even though the Uniform Securities Act does not hinder the payment of referral fees by the investment advisers, it is required that the fees should be disclosed.

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