Series 26 Practice Exam 2025 – Full Prep for Investment and Variable Contracts Principals

The correct amount of written notice required for terminating the adviser contract by the Board of Directors is 60 days. This timeframe is typically stipulated in investment advisory contracts to provide both parties sufficient time to address any outstanding obligations or to arrange for a transition to a new advisor.

A 60-day notice period is considered a standard practice in the industry, balancing the need for the advisor to wind down their activities and for the Board to find a replacement, if necessary. This notice period helps avoid any abrupt disruptions in service that could negatively impact the clients involved. By allowing a 60-day notice, it ensures that any potential impacts on clients and investments can be managed appropriately, maintaining the integrity of the advisory services during the transition.

Other durations, such as 30, 90, or 180 days, either do not align with standard industry practices or would either unduly restrict the flexibility of the board (in the case of a shorter period) or impose an unnecessarily extended timeline for both parties (in the case of a longer period).