This final section pulls together everything you've learned about investment adviser representative (IAR) registration and compares it side-by-side with agent registration. Many rules are identical, but the differences are what the exam tests.
Side-by-Side Comparison
| Feature | Agent (of Broker-Dealer) | IAR (of Investment Adviser) |
|---|---|---|
| Statutory definition | USA agent definition | USA IAR definition |
| Registration form | Form U4 | Form U4 |
| Must be employed by | Registered broker-dealer (BD) or issuer | Registered investment adviser (IA) or federal covered adviser |
| Tied registration | Yes; inactive without a BD | Yes; inactive without an IA |
| Federal covered adviser IARs | N/A | Must register in states where IAR has a place of business |
| Exam requirement | Series 63 | Series 65, or Series 66 + Series 7 + SIE |
| Professional designation waiver | None for Series 63 | A qualifying designation (current and in good standing) waives the Series 65 |
| De minimis exemption | Limited | 5 or fewer non-institutional clients, no in-state office |
| Consent to service of process | Yes; irrevocable | Yes; irrevocable |
| Annual expiration | December 31 | December 31 |
| Denial/revocation grounds | USA statutory grounds | Same statutory grounds |
| Termination notice | Prompt notice to the Administrator | Prompt notice to the Administrator |
| Withdrawal effective | 30 days | 30 days |
Key Similarities
Several elements are identical for agents and IARs:
- Both use Form U4 for registration, and both require prompt notice to the Administrator on termination
- Both have tied registration that becomes inactive when they leave their sponsoring firm
- Both require consent to service of process that is irrevocable and survives termination
- Both expire on December 31 and require annual renewal
- Both face the same statutory grounds for denial, revocation, suspension, and cancellation under the USA
- Both have 30-day withdrawal periods with the same exception for pending proceedings
Key Differences
The exam focuses on four key differences:
1. Qualifying Exams
- Agents: Series 63 is the state law exam
- IARs: Series 65 alone, or the Series 66 + Series 7 + SIE combination
2. Professional Designation Waivers
- Agents: No professional designation can waive the Series 63 requirement
- IARs: A qualifying professional designation, current and in good standing, can waive the Series 65 requirement
3. De Minimis Exemption
- Agents: Limited exemption availability
- IARs: Clear de minimis exemption for IAs with no place of business in the state and 5 or fewer non-institutional clients (or only institutional clients) in the past 12 months
4. Place-of-Business Rule for Federal Covered Advisers
- Agents: Not applicable (there is no "federal covered broker-dealer" equivalent in this context)
- IARs: IARs of federal covered advisers must register only in states where they have a place of business, not wherever they have clients
Exam Tip: Gotchas
- The grounds for denial, revocation, and suspension are the SAME for both agents and IARs under the USA. There is no need to memorize separate lists.
- The biggest testable differences are: (1) the qualifying exams, (2) the professional designation waiver available only to IARs, (3) the de minimis exemption for IARs, and (4) the place-of-business rule for IARs of federal covered advisers.