Definition of an Investment Adviser Representative

The whole unit on one sheet: who counts as an IAR, where they register, and the exams they need.

Who Is an IAR?

• An IAR is an individual associated with an IA that is registered or required to be registered, or with a 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 to give
  • Solicits or negotiates for advisory services
  • Supervises anyone who does the other four
• Only one function is needed, so a pure solicitor IS an IAR. There is no free-standing IAR registration: terminate the association and it goes inactive.

Where Does an IAR Register?

• 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: the IAR registers only in states where the IAR has a place of business, regardless of where clients sit.
• The de minimis exemption needs BOTH no place of business in the state AND either institutional clients only or no more than 5 non-institutional clients in the prior 12 months.

How Does an IAR Register, and Which Exams Apply?

• Filed on Form U4 by the IA firm, not the IAR, and not "filed" until the fee and all submissions arrive. The consent to service of process is one-time, irrevocable, and survives termination.
• Registration is effective at noon on the 30th day after a complete application (the Administrator never "approves") and expires December 31 unless renewed.
• Qualifying exam: Series 65, OR Series 66 plus Series 7, each within 2 years, plus the SIE within 4 years. Series 66 alone is not enough.
• A current professional designation in good standing waives the entire exam requirement: CFP, ChFC, PFS, CFA, or CIMA, which replaced CIC in 2024.
• Re-registering within 2 years skips the retake. Beyond that the exams are due again, unless FINRA's Maintaining Qualifications Program preserves the FINRA-administered pieces, never the Series 65 or 66.

What Are the Post-Registration Duties?

• The Form U4 update duty is continuing, and both the IAR and the IA file amendments. The NASAA Model Rule defines "promptly" as within 30 days.
• A correcting amendment is owed whenever a filed document becomes materially inaccurate, including a criminal charge, not just a conviction. Recordkeeping and examination duties belong to the investment adviser, not the IAR.
• An IAR has no capital, net worth, or bonding requirement, even when exercising discretion. Those provisions name broker-dealers, agents, and advisers, never the IAR.
• On termination, the IA's Form U5 discloses "permitted to resign" as its own category, distinct from a clean voluntary resignation.

How Do Denial, Revocation, and Withdrawal Work?

• Action needs both a public-interest finding and a listed statutory ground, from the same list used for agents and broker-dealers. An IAR's own insolvency is a valid ground.
• Due process requires notice, a hearing opportunity, and written findings, except for a summary order. On a written hearing request the Administrator has 15 days to set it down.
• Withdrawal takes 30 days, or sooner at the Administrator's discretion, but a willful-violation proceeding can still follow within 1 year.
• Failure to supervise is a firm-level ground, not a free-standing ground against an individual.

Which One-Liners Win Points?

• Passing the Series 65 does not by itself make someone an IAR, and a partner, officer, or director is not automatically one. Either way, the person must perform a listed function and register through a firm.
• A state-registered IA notifies the Administrator of a hire or termination; for a federal covered adviser the IAR notifies directly.

Which Numbers Matter Most?

Which Gotchas Trip Students Up?

• Place of business, not client location, drives federal-covered-adviser IAR registration: a home office in State A with clients in A, B, and C means register in A only. The adviser itself is exempt from state registration, but the IAR is not. Any in-state office kills the de minimis exemption.
• Solely clerical staff are NOT IARs, and neither is someone advising only on non-securities products.
• A supervised IAR is not held to the IA's own qualification standard.
• The 90-day rule is narrow: it blocks action based only on a final order the applicant itself disclosed before effectiveness.

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. An IAR of a federal covered adviser still registers with each state where they keep a place of business, and the same denial and revocation grounds that apply to agents apply to IARs.

Need more than the recap? Read the full Definition of an Investment Adviser Representative unit.