Quick Answer
An IAR always registers at the state level, by Form U4 filed through the IARD, in every state where the IAR has a place of business, regardless of whether the employing adviser is state-registered or SEC-registered. Registration requires passing a qualifying exam (or holding a waiver-eligible designation) and staying current on Form U4 amendments, books and records, and continuing education.
This section covers IAR registration requirements, qualification exams, de minimis exemptions, Form U4 amendments, books and records, continuing education, and supervision of IARs.
Where Do IARs Register?
IARs always register with states, never with the SEC. Even if the employing IA is federally registered (SEC-registered), the IAR registers at the state level.
- How: File Form U4 (Uniform Application for Securities Industry Registration or Transfer) through the IARD (Investment Adviser Registration Depository) system
- The investment adviser firm (not the individual IAR) submits the Form U4 on behalf of the IAR
Which State Has Registration Authority?
- An IAR must register in the state where the IAR has a place of business
- For IARs of state-registered advisers: register in each state where the IAR has a place of business
- For IARs of federal covered advisers: register in each state where the IAR has a place of business (states retain authority to require registration of IARs even when the adviser itself is federal covered)
Exam Tip: Gotchas
- Federal covered advisers register with the SEC, but their IARs must still register with each state where they have a place of business. States retain jurisdiction over IARs regardless of whether the adviser is state-registered or SEC-registered.
What Exam Do IARs Need to Pass?
To register as an IAR, an individual must pass a qualifying examination:
| Exam Path | Details |
|---|---|
| Series 65 | Uniform Investment Adviser Law Examination, passed within the preceding 2 years (standalone path) |
| Series 66 + Series 7 + SIE | Series 66 (Uniform Combined State Law) and Series 7 within the preceding 2 years, plus the SIE within the preceding 4 years |
| Professional designation waiver | Holders of qualifying designations in good standing may waive the exam requirement |
- Exam reciprocity: an individual who has been registered as an IAR in any state within the two years before filing the application is not required to retake the qualifying examinations
Which Designations Waive the Exam?
Five designations waive the Series 65 exam requirement:
- CFA: Chartered Financial Analyst
- CFP: Certified Financial Planner
- ChFC: Chartered Financial Consultant
- PFS: Personal Financial Specialist
- CIMA: Certified Investment Management Analyst
Key rules for designation waivers:
- The designation must be currently held and in good standing to qualify for the waiver
- The waiver applies only to the Series 65 exam requirement, not to state registration itself
- The IAR must still file Form U4, pass a background check, and pay state fees
Exam Tip: Gotchas
- A qualifying designation waives only the exam, not the registration. If the designation lapses, the waiver is no longer valid, and the individual must meet another qualifying exam route.
- The list is five, not six, and CIC is not on it. NASAA replaced CIC (Chartered Investment Counselor) with CIMA in May 2024, and the CIC program was discontinued in 2025. Older prep books and some state rules that have not yet conformed still list CIC. If an answer choice offers CIC, it is not a qualifying designation under the model rule.
What Activities Require Registration?
The following activities require IAR registration:
- Making investment recommendations to clients
- Managing client accounts or portfolios
- Determining which advice should be given to specific clients
- Soliciting or selling investment advisory services
- Supervising persons who perform any of the above
Who Is Excluded from Registration?
The following individuals are NOT required to register as IARs:
- Clerical and ministerial personnel who do not perform advisory functions
- Under the federal IAR definition: supervised persons of federal covered advisers who do not regularly solicit, meet with, or communicate with clients
- Persons providing only impersonal investment advice (e.g., written publications of general circulation not tailored to individual clients)
What Is the De Minimis Exemption?
An IAR who does not have a place of business in a state may be exempt from registration in that state if the IAR has fewer than 6 clients who are residents of that state during the preceding 12-month period.
Key points:
- Institutional clients generally do not count toward the client threshold
- The exemption requires both conditions: (1) no place of business in the state AND (2) fewer than 6 resident clients
- Having even one office in the state (including a satellite or part-time office where the IAR operates) eliminates the exemption regardless of client count
Exam Tip: Gotchas
- The de minimis exemption has two requirements that must both be met. Having a place of business in a state means you must register there even if you have only 1 client.
What Happens After Registration?
When Must Form U4 Be Amended?
IARs have a continuing obligation to amend Form U4 whenever disclosed information changes.
Reportable events that require prompt Form U4 amendment:
| Event Type | Disclosure Deadline | Examples |
|---|---|---|
| Statutory disqualification | Within 10 days | A disqualifying felony conviction or a regulatory bar |
| Other disclosable events | Within 30 days | A pending criminal charge (not yet a conviction); regulatory actions, customer complaints (alleging $5,000+), financial disclosures (bankruptcies, liens, judgments), civil litigation, terminations for cause |
| Address/employment changes | Within 30 days | Change of employer, residential address, or business address |
Important disclosure rules:
- All felonies must be disclosed (no time limit)
- Securities-related misdemeanors must be disclosed (no time limit)
- Disclosure is required for charges, not just convictions
- Filing misleading information or omitting material facts on Form U4 can result in denial, suspension, or revocation of registration
Exam Tip: Gotchas
- Form U4 requires disclosure of criminal charges, not just convictions. A pending felony charge is a 30-day amendment, not 10; the 10-day deadline is reserved for a disqualifying conviction or regulatory bar. An IAR charged with a felony must disclose it, even before trial.
- A felony later reduced to a misdemeanor or dismissed must still be reported as originally charged.
What Records Must Be Maintained?
Investment advisers must maintain books and records related to their IARs' activities.
Required records include:
- Client communications (emails, letters, advertising materials)
- Trade records and account documentation
- Advisory contracts and written agreements
- Financial planning documents provided to clients
- Evidence of supervisory reviews
Records must generally be maintained for 5 years (first 2 years in an easily accessible place).
How Do IARs Maintain Their Registration?
IARs must maintain their registration by:
- Keeping Form U4 current with prompt amendments
- Completing applicable continuing education requirements
- Paying annual registration renewal fees
- Remaining associated with a registered investment adviser
What Are the CE Requirements?
The NASAA IAR Continuing Education (CE) Model Rule establishes CE requirements for IARs. States must individually adopt the model rule for it to apply to IARs in that state.
How Many CE Credits Are Required?
| Component | Credits Required | Content Focus |
|---|---|---|
| Ethics and Professional Responsibility | 6 credits per reporting period (at least 3 credits must cover ethics specifically) | Fiduciary duty, regulatory obligations, ethical standards |
| Products and Practice | 6 credits per reporting period | Investment products, strategies, compliance practices |
| Total | 12 credits per year | Combined ethics/regulatory + products/practice |
- 1 credit = at least 50 minutes of educational instruction
- Reporting period = 12-month calendar year (January 1 - December 31)
- CE must be completed through an Authorized Provider
How Can Other CE Satisfy the Requirement?
| Situation | Compliance Path |
|---|---|
| IAR also registered as agent of FINRA member | FINRA CE satisfies the Products and Practice requirement (6 credits) if FINRA content meets the baseline criteria; IAR must still complete the Ethics and Professional Responsibility requirement separately |
| IAR holds qualifying credential (CFP, CFA, ChFC, PFS, CIMA) | Credential CE satisfies both the Ethics and Professional Responsibility and Products and Practice requirements if the CE is mandatory for maintaining the credential and the content is approved |
| IAR registered in multiple states | Compliance with the Home State's CE requirement satisfies other states if the Home State's requirements are at least as stringent as the model rule |
What Happens If CE Isn't Completed?
- IAR who fails to complete CE by end of reporting period renews as "CE Inactive"
- CE Inactive status: the registration still renews, so the IAR may continue conducting advisory business while completing the missing CE
- IAR who remains CE Inactive at the close of the next calendar year is not eligible for registration or renewal
- No carry-forward: excess credits in one period cannot be applied to a subsequent period
What CE Is Owed After a Registration Lapse?
- An IAR who was previously registered and became unregistered must complete CE for all reporting periods between de-registration and re-registration
- Exception: the IAR can satisfy this by retaking and passing the qualifying exam (e.g., Series 65) instead of completing back CE
Exam Tip: Gotchas
- CE credits do NOT carry forward. Completing 18 credits in one year does not reduce the 12-credit requirement for the following year.
- An IAR who lets their registration lapse must either complete all missed CE or retake the qualifying exam.
- FINRA dual registrants get a partial exemption. FINRA CE counts for Products and Practice only, not Ethics and Professional Responsibility.
Who Supervises IARs?
The investment adviser firm is responsible for supervising its IARs. Supervision requirements include:
- Establishing and enforcing written supervisory procedures
- Designating a supervisor responsible for each IAR's activities
- Conducting periodic reviews of client accounts handled by IARs
- Reviewing and approving advertising and client communications
- Monitoring for conflicts of interest and suitability of recommendations
The IA firm is liable for the acts of its IARs performed within the scope of employment or authority. A firm that fails to reasonably supervise an IAR can face administrative sanctions, including censure, fine, suspension, or revocation of registration.
Exam Tip: Gotchas
- Supervision is the investment adviser firm's responsibility, not the IAR's. The exam may test whether the firm or the individual is liable for supervisory failures. The firm cannot escape liability by claiming it delegated supervision to someone who failed to perform it.
What Should You Check on Exam Day?
- IARs register only at the state level, by Form U4 through the IARD, filed by the IA firm, in every state where the IAR has a place of business, even when the employing adviser is SEC-registered.
- Know the exam paths: Series 65 standalone, or Series 66 plus Series 7 plus the SIE, and that five designations (CFA, CFP, ChFC, PFS, CIMA) waive only the exam, not registration itself. CIC is no longer a qualifying designation.
- The de minimis exemption requires both no place of business in the state and fewer than 6 resident clients in the preceding 12 months.
- Form U4 amendments are due within 10 or 30 days depending on the event type; all felonies and securities-related misdemeanors must be disclosed with no time limit, and disclosure is required for charges, not just convictions.
- Books and records must generally be kept 5 years, with the first 2 years in an easily accessible place.
- CE is 12 credits per year: 6 ethics and professional responsibility (at least 3 ethics-specific) plus 6 products and practice, with no credit carry-forward between periods.