Under the Investment Advisors Act of 1940, if a registered investment advisor requires prepayment of $1200 or more of advisory fees, 6 months or more in advance of rendering services, the advisor must

give each new client a copy of his balance sheet

Explanation:

Note that an investment advisor manages the money or financial assets of their clients such as stocks, bonds, and mutual funds-and then buy, sell, and monitor them as directed by the clients.

According to the Investment Advisors Act of 1940 a federal law which defines the role and responsibilities of an investment advisor/adviser, in such a scenario the investment advisor would provide each new client a copy of his balance sheet.

Under the Investment Advisers Act of 1940, if a registered investment advisor requires prepayment of $1200 or more of advisory fees, 6 months or more in advance of rendering services, the advisor must:

A. give discretionary authority to the adviser

B. receive a copy of the adviser's balance sheet

C. be provided with a "Brochure" at least 5 days in advance of signing a contract

D. be reported to the Securities and Exchange Commission

Explanation:

The best answer is letter B: the adviser must include a balance sheet in the ADV Form Part 2A that constitutes the "Brochure" that must be given to customers at, or previous to, entering into an advisory contract.