A federal covered investment adviser would like to charge a client a performance fee based on a selected benchmark. The client has $400,000 invested with the adviser but has a net worth of $2,150,000, of which $350,000 represents an investment account, 50% of which is shared with his cousin. a. Because the client's 50% share of the investment account is only $175,000, this client does not qualify for a performance-based compensation program.
b. Because we can allow all of the jointly held property, this client has the necessary net worth to qualify for a performance-based compensation program.
c. Because the total of the amount invested with the adviser ($400,000) plus the individual's personal net worth ($1,800,000 without counting the joint property) exceeds $2 million, this client has the necessary net worth to qualify for a performance-based compensation program.
d. Because we can allow none of the jointly held property, this client does not have the necessary net worth to qualify for a performance-based compensation program.