Let's look at a practice question that will look similar to something you'll probably see on your Series 7 exam:
To establish an account under the Uniform Gifts to Minors Act, the custodian must be a:
B. a registered investment adviser
C. an immediate family member of the beneficiary
D. a person who has reached the state's age of majority
EXPLANATION: the custodian simply needs to be an adult (not a minor). He/she does not need to be related to the beneficiary and does not need to be a professional investor. If you open an UGMA account for your niece, you can manage the investments yourself for the benefit of the minor child. And, the beneficiary does not need to be a relative; perhaps the neighbor boy you hire to cut your grass would enjoy a surprise upon his 18th or, perhaps, 21st birthday . . .?