What is an 'Investment Advisory Representative - IAR'

Investment Advisory Representative (IAR) refers to personnel who work for investment advisory companies. The primary responsibility of an IAR is to provide investment-related advice. According to regulations, IARs can only offer advice on topics on which they have passed the appropriate examinations. An IAR must register with a Registered Investment Advisor (RIA) firm. IARs receive compensation by charging fees.

BREAKING DOWN 'Investment Advisory Representative - IAR'

In addition to passing the appropriate exams, an Investment Advisory Representative must be registered with the proper state authorities. To expand their knowledge of financial products and principles, many IARs hold either the Certified Financial Planner (CFP) or Chartered Financial Analyst (CFA) designations.

Investment Advisory Representative Registration

IARs register in the state in which they provide investment advice; they do not require Securities and Exchange Commission (SEC) registration. In the majority of states, IARs are required to file Form U4, which is the Uniform Application for Securities Industry Registration. The form then gets filed on the Central Registration Depository (CRD) system.

IARs in most states are typically required to pass the Series 65 exam. The Financial Industry Regulatory Authority (FINRA) administered exam consists of 130 scored questioned in which candidates have 180 minutes to complete the exam. Alternatively, to passing the Series 65 exam, IARs may pass the Series 66 and Series 7 exams. Some states allow for substitution credentials. For example, an individual may not have to pass the Series 65 exam if he or she holds a CFP designation. IARs have no continuing education requirements once registered. It is essential for RIA firms to ensure their IARs are registered correctly to avoid significant penalties.

Investment Advisory Representative Responsibilities

IARs typically perform the following functions:

  • Make Recommendations: IARs use their skill and judgment to make recommendations about different securities. They may use research produced by their firm to make an investment decision. For example, an IAR might make a buy recommendation to a client after analyzing a research note.

  • Manages Client Accounts: This includes all aspects of account management from managing discretionary accounts, to following up on administration issues. For instance, an IAR may request additional funds from an investor to settle an outstanding trade.

  • Advisory Services: IARs may provide general investment advice. For example, they may present a daily market report at a local television station or write a weekly investment column for a newspaper.

  • Supervise other IARs: An Investment Advisory Representative may manage other IARs. For example, they may ensure new staff met all regulatory requirements. IARs may also help train junior team members and monitor the investment advice they give to investors.

  1. Series 79

    The Series 79 exam is an examination to determine whether a registered ...
  2. Series 24

    The Series 24 is an exam and license entitling the holder to ...
  3. Series 72

    The Series 72 is a FINRA licensing exam for individuals who want ...
  4. Registered Principal

    A registered principal is a licensed securities dealer who is ...
  5. Series 4

    The Series 4 is an exam and securities license entitling the ...
  6. Series 3

    The Series 3 is a securities license entitling the holder to ...
Related Articles
  1. Financial Advisor

    Series 63, Series 65 Or Series 66?

    When joining the world of investment professionals, you must take the right exams.
  2. Financial Advisor

    Introduction to the Series 65 exam

    The Series 65 is required in many states in order to be a fee-based advisor. Find out what it is and whether you need it.
  3. Financial Advisor

    Sell-Side Analysts Need Series 86/87 Exams

    Though these tests are not particularly difficult or comprehensive, passing them is mandatory to work as a sell-side analyst.
  4. Financial Advisor

    Portfolio Returns: What's Reasonable to Expect?

    You need to know what to expect when you decide to invest, which will help you weather temporary declines.
  5. Financial Advisor

    How Hard are the CFA Exams?

    Learn about the difficulty of the CFA exams with a description of the tests, some statistics on pass rates and suggestions that can help you pass the exams.
  6. Insights

    FINRA Files Plans to Change Series 7 and Other Exams

    New details have emerged on the Securities Industry Essentials Exam required for becoming a registered representative.
  7. Personal Finance

    What To Do If You Failed Your CFA Exam

    Follow these steps to increase your odds of passing your next CFA exam.
  8. Financial Advisor

    Breaking Down Financial Securities Licenses

    Find out which exam you need to begin your career as an investment professional.
  9. Financial Advisor

    Tips on Passing the CFA Level I on Your First Attempt

    Obtain valuable tips and helpful study instructions that can help you pass the Level 1 Chartered Financial Analyst exam on your first attempt.
  10. Financial Advisor

    Series 7 Exam Prep: Options

    One of the most challenging topics in the series 7 exam is options. Find out what you need to know before you take the test.
  1. How many attempts at the Series 7 exam are permitted?

    There is no limit on the number of times you can attempt to pass the Series 7 exam, however, there are restrictions regarding ... Read Answer >>
  2. What major is required to take the Series 7 examination?

    Find out what educational requirements are needed for the Series 7 exam. Learn about the new Securities Industry Essentials ... Read Answer >>
  3. How many people fail the series 63 exam every year?

    How many stock brokers failed the Series 63 exam before they passed successfully? Here is what you need to know before taking ... Read Answer >>
Trading Center