Registration
The initial registration fee varies from state to state, and there is no proration if an adviser registers at mid-year.

  • Registration is typically effective 30 days after the completed application is received.
  • Registrations must be renewed by December 31, and a renewal fee is required.
  • Most states require annual renewal, although some do call for bi-annual renewal.

Record Keeping Requirements
IAs must maintain client records and keep them current. Additional record keeping requirements may also be set by the administrator of the IA's home state. Typically, the following are required:

  • Books and financial records
  • Adviser contracts
  • Client reports
  • Inspections
  • Advertising and sales literature

These records must be maintained in an easily accessible place for a period of five years from the end of the fiscal year during which the last entry was made. For the first two years, the records must be maintained in the adviser's principal office.


Exam Tips and Tricks
You are likely to be questioned about the particulars of record keeping requirements. Be sure to know how long and where records must be stored by an IA. Here is a possible question:

  1. How long are investment advisers required to maintain books and records under the Investments Advisers Act of 1940?

  1. Five years from the date the record was created
  2. Five years from the date of the last entry
  3. Two years from the date of the last entry
  4. Five years from the end of the fiscal year during which the last entry was recorded

The correct answer is "d". The Investment Advisers Act of 1940 requires records be maintained for five years from the end of the fiscal year in which the last entry was made. During the first two years, the records must be maintained in an office of the adviser. For the final three years, the records may be stored off site, but they must be readily accessible.

Refer the Investment Adviser Guide on the NASAA website for further details about record keeping requirements for IAs.



Introduction

Related Articles
  1. Financial Advisor

    Question the Funds Picked By Your Financial Advisor

    Learn the importance of having a financial adviser whom you can trust and why questioning the funds he selects is part of that process.
  2. Financial Advisor

    The Pros & Cons of a Financial Advisor Career

    Discover what a career as a financial adviser entails, and learn what pros and cons an individual faces when embarking on a career in this field.
  3. Financial Advisor

    5 Traits the Best Financial Advisors Share

    Discover what the best financial advisers share in terms of the traits they possess, and learn what clients value most in their advisers.
  4. Financial Advisor

    5 Traits the Worst Financial Advisors Share

    Learn how the worst financial advisers tend to share common traits, including greed, arrogance, ignorance and being difficult to reach when times are tough.
  5. Financial Advisor

    How Much Does A Financial Advisor Earn?

    Several things factor into the salary of a financial advisor. Here's a look.
  6. Investing

    Series 63 Exam State Securities Administrator

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

    Top SEC Exam Hacks for Financial Advisors

    These five tips will help financial advisors pass muster when the SEC comes knocking.
  8. Entrepreneurship & Small Business

    Starting A Small Business: Record Keeping

    By Amy Fontinelle Creating and maintaining thorough business records is essential. These records will help you analyze your business's profitability, stay out of trouble with tax authorities, ...
  9. Financial Advisor

    3 Digital Platforms FAs Should Keep on Their Radar

    Find out which digital platforms financial advisers should look to as the trend toward adviser-based digital advice continues into 2016.
  10. Financial Advisor

    How to Train Your New Financial Advisor

    Once you've hired a new adviser, an equally important process begins: training them.
Trading Center