An investment adviser (IA) can be either an individual or a company. If you are providing investment advisery services as an employee of an IA, you are actually an investment adviser representative (IAR).
If you are listed as a partner, officer, or director of an IA at the time of initial registration, you do not need to register separately as an IAR. If not, you must register as an IAR through your state. Your employing firm will supply the necessary information for registration.
IA employees who perform any of these functions must register as an IAR:
- Making investment recommendations or giving securities advice
- Managing client accounts or portfolios
- Soliciting or offering investment advisery services
- Supervising employees who perform any of the above
IA employees who have only clerical duties do not have to register as IARs.
Watch for questions that ask if an office manager who supervises account managers or solicitors has to register as an IAR. While those who have only clerical duties do not needto register, those who supervise IAR employees must do so.
Exam Tips and Tricks
Watch out for the distinction between an IA and an IAR when you are reading exam questions, since there may be differences in registration requirements. You will likely find a number of questions that refer to both IAs and IARs, such as these two examples:
All of the following statements regarding individuals who transact business in the state are true EXCEPT:
- Investment adviser representatives must register in the state
- Investment advisers must register in the state
- Representatives of federal covered advisers must register in the state
- Federal covered advisers must register in the state
The correct answer is "d", since federal covered advisers are not required to also register with the state.
- The "consent to service of process" must accompany which of the following?
- Investment adviser's initial registration application
- Investment adviser representative's initial registration application
- Investment adviser representative's renewal registration application
- Non-criminal complaint filed against an investment adviser
- II & III
- I & IV
- I & II
- I, II & III
The correct answer is "c" - the consent to service of process is only necessary at the time of initial registration for both investment advisers and investment adviser representatives.
Financial AdvisorWhen joining the world of investment professionals, you must take the right exams.
Financial AdvisorLearn the importance of having a financial adviser whom you can trust and why questioning the funds he selects is part of that process.
Financial AdvisorUnderstand what creates dissatisfaction between financial advisers and their firms, and learn the top reasons advisers ultimately make the decision to leave.
Financial AdvisorDiscover what the best financial advisers share in terms of the traits they possess, and learn what clients value most in their advisers.
Financial AdvisorIs an online adviser right for you? As with most questions in financial planning, the answer is 'it depends.' Here are a few thoughts to consider.
TechSeveral things factor into the salary of a financial advisor. Here's a look.
Financial AdvisorHere's how investment advisers can set up a compliance program that adheres to SEC requirements.
Financial AdvisorPay attention to the habits of your financial adviser to avoid him ripping you off by commingling, churning, scamming or embezzling your money.
Financial AdvisorShould you use an online financial planning service, or do professional, fee-based financial planners justify their higher costs?
Financial AdvisorYou need to know what to expect when you decide to invest, which will help you weather temporary declines.