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

    The Top 5 Reasons Financial Advisors Leave Their Firm

    Understand what creates dissatisfaction between financial advisers and their firms, and learn the top reasons advisers ultimately make the decision to leave.
  2. 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.
  3. Personal Finance

    Career Advice: Financial Analyst Vs. Financial Adviser

    Read an in-depth review of the differences between a career as a financial Adviser versus a career as a Financial Analyst, including how to decide which is best.
  4. Financial Advisor

    4 Signs Your Financial Advisor Is Ripping You Off

    Pay attention to the habits of your financial adviser to avoid him ripping you off by commingling, churning, scamming or embezzling your money.
  5. Retirement

    The Risk of Offering Social Security Advice

    Savvy financial advisers will either need to gain Social Security advice expertise or find a source or partner to provide this vital service to clients.
  6. Investing

    Explaining Double Entry Accounting

    Double entry is an accounting and bookkeeping term describing the method of entering transactions into the accounting records.
  7. Investing

    M&A Hits a Record in 2015

    2015 has been a record year for mergers and acquisitions as M&A activity hit record levels, fuelled by consolidation in various industries such as semiconductors and healthcare.
  8. Financial Advisor

    Growth Strategies For Financial Advisors

    These 5 strategies offer financial advisors a blueprint on how to grow their practices.
  9. Taxes

    Fund a Lifetime of Giving with Donor Advised Funds

    Donor advised funds can have tremendous tax, cost and administrative benefits.
  10. Personal Finance

    Things You Didn't Know About Background Checks

    Employers may look into more than you might think before deciding whether or not to hire you.
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