A Guide For Aspiring Financial Professionals: Customer Accounts

Aspiring financial professionals need to have a broad understanding of customer accounts and the different registration types. Series 7 exam takers will need to know about individual, joint, corporate/institutional, trust (e.g., revocable, irrevocable), custodial (e.g., UTMA), partnerships, and retirement (e.g., individual retirement account (IRA), qualified plans) accounts. This article will provide an overview of each type of account and its characteristics.


Customer accounts are invaluable tools for managing personal finances and planning for the future. There are a variety of different types of customer accounts, including individual, joint, corporate/institutional, trust (e.g., revocable, irrevocable), custodial (e.g., UTMA), partnerships, and retirement accounts.


Individual accounts are those that belong to an individual person or entity and can be used to purchase various financial products such as stocks, mutual funds, bonds, or real estate. These accounts may be opened singularly or jointly with one or more other parties. Joint accounts allow two or more customers to manage their finances together; however, these accounts typically require both account holders to sign off on any transactions made using the account.


Corporate accounts, sometimes referred to as institutional accounts, are typically opened by businesses or nonprofits in order to manage their finances and assets. These types of accounts may be opened by a single organization, or they may be joint with other organizations or individuals. Some examples of corporate accounts include 401(k)s and IRAs.


Trust accounts, also known as revocable trusts, are typically created by individuals who wish to pass on their assets to another party upon their death. Irrevocable trusts, on the other hand, cannot be modified once they have been established and are primarily used for tax planning purposes. Other common types of trust accounts include custodial (e.g., UTMA), partnerships, and retirement accounts.


Required minimum distributions, or RMDs, are an important aspect of many customer accounts, including IRAs and qualified retirement plans. RMDs refer to the minimum amount that must be withdrawn from an account each year according to tax regulations. Generally speaking, these amounts must be withdrawn by the end of the calendar year in order to avoid penalties.


If you are planning on pursuing a career as a financial professional, it is essential that you understand the various types of customer accounts and how they work. Whether you are preparing for the Series 7 exam or working towards a designation such as CFA or CFP, having a solid understanding of customer accounts will help you succeed in your career. So whether you’re interested in individual accounts, joint accounts, trust (e.g., revocable, irrevocable), custodial (e.g., UTMA), partnership, or retirement accounts, be sure to do your research and stay up-to-date on the latest trends and regulations in this rapidly changing industry.


These and many other topics will be covered on the Series 7 exam. Thankfully, Achievable offers comprehensive FINRA Series 7 practice exams to prepare you for the Series 7 Exam. With our Series 7 study materials, you will have the tools and knowledge needed to succeed on this important exam and launch your career as a financial professional. So if you’re ready to start preparing for the Series 7 exam, be sure to sign up with Achievable today!