Investment Advisor Representative Exam and Registration Requirements RIA IN A BOX Investment
Post on: 16 Март, 2015 No Comment
Investment Advisor Representative Exam and Registration Requirements
- Is the Series 65 a license?
No. The Series 65 is solely an examinations that is a pre-requisite for becoming a representative of an registered investment advisor (RIA) firm. Unfortunately, you cannot “hang” any previous licenses as part of your registered investment advisory firm (e.g. Series 7, etc.). The Series 65 by itself does not give you the right to give advice or charge fees, etc. You are still required to file your individual registration documents with your state jurisdiction, in most states a Form U4, and be approved by that jurisdiction before you can sign any clients or provide any advice for a fee. (Note: New York uses a registration document called an NY-IAQ, Minnesota will begin requiring registration of representatives for the first time in 2013, and Wyoming does not register investment advisor representatives.)
If you have successfully passed both the Series 7 and 66 examinations and have been affiliated with a broker/dealer in the past 24 months, than a prospective investment advisor representative will generally not be required to take the Series 65 examination as the active Series 7 and 66 combination will suffice.
If you spend a solid 10-12 hours studying, you generally should have a good chance to pass. A member of our staff helps NASAA (North American Securities Administrators Assoc. – they are responsible for the creation of the Series 63, Series 65, and Series 66 exams) write and review their bank of test questions and he assures us that while the questions are written to be “entry level” in nature, they are not easy. If you don’t study you will likely find yourself unable to pass and have to wait 30 days and pay another $165 (current fee as of June 1, 2013) to retest. There are a number of companies that provide Series 65 exam prep materials. Clients of RIA in a Box receive a discount on Kaplan Series 65 exam preparation materials. NASAA has also provided a 65 outline which highlights the types of questions found on the exam: Series 65 Exam Outline .
There are a number of professional designations that will often be accepted in lieu of an examination. They include the Certified Financial Planner (CFP®). Chartered Financial Analyst (CFA). Certified Insurance Counselor (CIC). Chartered Financial Consultant (ChFC®). or Personal Financial Specialist (PFS). In general, it is much easier to study and successfully pass the Series 65 exam compared to attempting to achieve one of these professional designations which generally require additional education and a significant time investment.
Either the individual should file a Form U10 or the individual’s firm should file the Form U4. Once registered, the 120-day window will open to schedule the exam. Unlike the Series 7 or Series 66 exams, a prospective investment advisor representative does not need to be “sponsored” by any firm to take the Series 65 exam.
There is no continuing education requirement. As of today, neither the firm nor any representatives of the firm need continuing education. This includes the CCO (Chief Compliance Officer). However, remember that if you have an investment adviser representative that is also a registered representative of a broker/dealer firm firm, the registered representative will typically have both firm element and “outside provider” continuing education requirements as part of their broker/dealer affiliation.
All individual investment advisor representative annual registration fees are billed to the associated RIA firm. All fees are administered at the state level. The annual fees assessed by states range from $10 to $285. In general, most states charge an annual registration fee ranging from $60 to $85. The investment advisor representative registration fees are charged in addition to any annual fees assessed to the RIA firm itself.
The Form ADV 2B is the paper brochure that Investment Adviser Representatives must (in most cases) provide to clients. This form contains employment, educational, conflict of interest, and disciplinary information. Generally, Executive Officers, any person generating investment advice provided to clients, and any representative advising clients must have a Form ADV Part 2B.
A dual registrant is an individual investment advisor who is registered to multiple investment firms. Most states allow individuals to be dually registered to multiple firms, but there are some states which do not allow this practice including Alaska, Mississippi, Nebraska, Oregon, South Carolina, Utah, and Virginia. Other states only allow dual registration to affiliated firms. Affiliated firms are generally firms under common control or ownership.
Yes, in order to conduct investment advisory business, an investment adviser representative must be registered to an RIA firm. Similarly, every investment advisory firm needs at least one investment advisor representative registered to the firm. Thus, a prospective investment advisor looking to start his or her own advisory business would need to register a new RIA firm, either with the SEC or relevant state(s), and then have his or her own individual registration registered to the new RIA firm at the state level. All individual registrations are administered at the state level regardless if the RIA firm is registered at the SEC or state level.
