Federal Registration Process
To register as an IA with the SEC, you are required to file Form ADV Part I and Part II.

  • Part I discloses basic information to regulators, such as contact and background information on the advisor and employees, number of accounts, compensation arrangements, etc.
  • Part II serves as a disclosure document to clients and potential clients. It can be used to satisfy the "Brochure Rule" discussed in Chapter 4 ("Client Communication").
  • The IA must amend Form ADV any time the information within it has changed.
  • The form must be resubmitted within 90 days of the end of each fiscal year.
  • If an advisor is no longer eligible for federal registration, it must withdraw its registration by filing a Form ADV-W Notice of Withdrawal from Registration within 180 days after the end of the fiscal year.
  • An IA also must file a Form ADV-W if it ceases to conduct business as an investment advisor.

The Investment Advisor Registration Depository (IARD)
All federal covered advisors are now required to register with the SECand file notice with the states via the Investment Advisor Registration Depository (IARD). The IARD is an electronic filing system for IAs, sponsored by the SECand the North American Securities Administrators Association (NASAA). This system collects and maintains data for both federal and state registered IAs.

Investment Advisors Representatives (IARs)
Employees of an IA who provide investment recommendations or advice, manage clients/portfolios, solicit or offer IA services, or supervise employees performing the aforementioned tasks.

Broker-Dealer Regulation
  1. Registration
    To sell securities, you must be associated with abroker-dealer. In addition to NASD registration under the Securities Exchange Act, both the broker-dealer firm and its employees (also referred to as agents or registered representatives) must be registered with each state where they transact business under the Uniform Securities Act. This Act is basically a model for state securities rules, often referred to as Blue Sky Laws. It was created in the 1950s so that broker-dealers and investment advisors could operate in multiple states and not have to fulfill different requirements in each state.
  2. The Registration Process
    The registration process is essentially the same for broker-dealers, agents, investment advisors, and investment advisor representatives. However, instead of the IARD system, broker-dealers and agents use the Central Registration Depository (CRD) system. While IA's use the IARD, their investment advisor representatives also use the CRD.

    To register, the applicant must file an application along with the consent to service of process and a filing fee. In addition, there may be a minimum net capital requirement and/or a bond to cover potential legal costs.



Reporting

Related Articles
  1. Financial Advisor

    Becoming A Registered Investment Advisor

    To become a registered investment advisor requires specific licensing, qualifications and regulations, but the greater freedom may be worth it.
  2. Financial Advisor

    What are the Different Types of Financial Advisors?

    There are two primary types of financial advisors: investment advisors and investment brokers, who work for broker-dealers.
  3. Investing

    Series 63 Exam State Securities Administrator

    Learn what you need to know about the state securities administrator to pass the Series 63 exam.
  4. Financial Advisor

    SEC on Advisor Performance Claims: 'Show Your Work'

    The SEC will now require advisors to keep records of any documentation that is distributed to clients that contains performance numbers of any kind.
  5. Investing

    Advisory Fees On The Series 66 Exam

    Learn what you need to know about investment advisory fees and contracts to pass the Series 66 exam.
  6. Financial Advisor

    The Pros & Cons of Partnering with a Broker/Dealer

    Financial advisors must determine a business model that meets their needs and meets the expectations of their clients.
  7. Financial Advisor

    Advisors Face More SEC Reporting Requirements

    The SEC has mandated that investment advisors provide more disclosure on separately managed accounts and performance numbers used in advertising.
  8. Financial Advisor

    Is Your Broker Legit? 6 Steps to Take

    The Great Recession may have ended, but broker wrongdoing hasn't. Here's how to make sure you don't get stuck with the next Bernie Madoff.
  9. Financial Advisor

    How Does Your Financial Advisor Get Paid?

    Some questions to ask your financial advisor about the recommendations they make and how they get paid.
  10. Financial Advisor

    Series 63, Series 65 Or Series 66?

    When joining the world of investment professionals, you must take the right exams.
Frequently Asked Questions
  1. Depreciation Can Shield Taxes, Bolster Cash Flow

    Depreciation can be used as a tax-deductible expense to reduce tax costs, bolstering cash flow
  2. What schools did Warren Buffett attend on his way to getting his science and economics degrees?

    Learn how Warren Buffett became so successful through his attendance at multiple prestigious schools and his real-world experiences.
  3. How many attempts at each CFA exam is a candidate permitted?

    The CFA Institute allows an individual an unlimited amount of attempts at each examination.Although you can attempt the examination ...
  4. What's the average salary of a market research analyst?

    Learn about average stock market analyst salaries in the U.S. and different factors that affect salaries and overall levels ...
Trading Center