Quick Answer
An investment adviser representative (IAR) is an individual who gives advice, manages accounts, decides what advice to give, solicits advisory business, or supervises those who do. IARs register on Form U4 through their sponsoring investment adviser (IA). An IAR of a federal covered adviser still registers with the state where they keep a place of business.
The whole unit on one sheet: who counts as an IAR, where they register, the exams they need, and how they compare to broker-dealer agents.
Who Is an IAR
- An investment adviser representative (IAR) is an individual (natural person only) associated with a registered IA or federal covered adviser who performs at least one of five functions:
- Makes recommendations or renders securities advice
- Manages client accounts or portfolios
- Determines which advice should be given
- Solicits, offers, or negotiates for advisory services
- Supervises anyone who does the other four
- Only one function is needed. A pure solicitor with no advice or account role IS an IAR.
- No free-standing IAR registration: an IAR must be tied to a sponsoring IA. Terminate, and the registration goes inactive.
Where an IAR Registers
- State-registered IA: the IAR registers in each state where the IA is registered and the IAR has clients or a place of business.
- Federal covered adviser (SEC-registered): the IAR registers only in states where the IAR has a place of business, regardless of where clients sit.
- De minimis exemption needs BOTH: no place of business in the state AND either only institutional clients or no more than 5 non-institutional clients in the prior 12 months. Antifraud rules still apply.
Registration Procedure and Exams
- Filed on Form U4 by the IA firm on the IAR's behalf; the IAR does not file directly.
- Consent to service of process: one-time, irrevocable, survives termination.
- Registration becomes effective at noon on the 30th day after a complete application (the Administrator never "approves").
- Qualifying exam: Series 65 alone, OR Series 66 plus Series 7 (Series 7 requires the SIE). Series 66 alone is not enough.
- A current, in-good-standing professional designation (CFP, ChFC, PFS, CFA, CIC, CIMA) can waive the exam.
The One-Liners That Win Points
- Passing the Series 65 does not by itself make someone an IAR; they must still register through a firm.
- A partner, officer, or director is not automatically an IAR; they must perform one of the five functions.
- State-registered IA notifies the Administrator of a hire or termination; for a federal covered adviser, the IAR notifies directly.
- Agent and IAR registration share Form U4, tied registration, irrevocable consent to service, a December 31 annual expiration, and a 30-day withdrawal.
Numbers to Lock In
| Item | Value |
|---|---|
| Functions that trigger IAR status | any 1 of 5 |
| Registration effective | noon on the 30th day |
| De minimis non-institutional client limit | 5 or fewer (prior 12 months) |
| Withdrawal effective | 30 days |
| Annual expiration | December 31 |
Top Gotchas
- An IAR of a federal covered adviser still registers with the state where they have a place of business, even though the adviser itself is exempt from state IA registration.
- Place of business, not clients, drives federal-covered-adviser IAR registration: a home office in State A with clients in A, B, and C means register in A only.
- Solely clerical or ministerial staff (receptionists, data-entry clerks, bookkeepers) are NOT IARs; neither is someone advising only on non-securities products.
- The de minimis exemption is lost entirely the moment the IA opens an in-state office, no matter how few clients.
- The grounds for denial, revocation, and suspension are the same for agents and IARs.
One-Breath Recap
An investment adviser representative is an individual who performs any one of five functions (advises, manages accounts, determines advice, solicits, or supervises those who do) for a registered investment adviser or federal covered adviser, and only clerical staff and non-securities advisers are excluded. IARs register on Form U4 through their sponsoring firm, file an irrevocable consent to service, and go effective at noon on the 30th day after passing the Series 65 or the Series 66 plus Series 7 path. The registration is tied to the firm, and an IAR of a federal covered adviser still registers with each state where they keep a place of business, not merely where clients live.
Need more than the recap? This is a condensed summary. If it is not enough, read the full Regulation of Investment Adviser Representatives unit for the complete lesson.