Registration Requirements
Now that you know who qualifies as an investment adviser representative (IAR), the next question is: where and how must they register?
State Registration
IARs must register at the state level; there is no federal registration for IARs. Key requirements:
- Register in each state where the IAR has a place of business OR meets with clients
- File Form U4 (Uniform Application for Securities Industry Registration or Transfer) through the Investment Adviser Registration Depository (IARD)/Web Central Registration Depository (CRD) system
- Provide consent to service of process (USA Section 414): By filing, the IAR consents to the state administrator receiving legal documents on their behalf
Qualifying Examinations
IARs may be required to pass one of these exam combinations:
- Option 1: Series 65 (Uniform Investment Adviser Law Examination)
- Option 2: Series 66 (Uniform Combined State Law Examination) + Series 7
Professional Designation Waivers
Under NASAA Model Rule 204(b)(6)-1, certain professional designations may waive the exam requirement. Holders of these credentials in good standing can skip the qualifying exam:
- CFA: Chartered Financial Analyst
- CFP: Certified Financial Planner
- ChFC: Chartered Financial Consultant
- PFS: Personal Financial Specialist
- CIC: Chartered Investment Counselor
Exam Tip: Gotchas
- Professional designation waivers excuse the exam, NOT the registration. If you hold a CFA or CFP, you can register as an IAR without taking the Series 65. However, you still must file Form U4 and register with the state.
Key Legal References
- NASAA Model Rule 202(a)-1: Specific registration requirements for IARs
- NASAA Model Rule 204(b)(6)-1: Examination requirements and waiver provisions
IARs of Federal Covered Advisers
Even when the advisory firm is SEC-registered, its individual IARs follow a different registration path:
| Entity | Regulated By | Registration |
|---|---|---|
| Federal covered adviser (the firm) | SEC | Registers with SEC; notice files with states |
| IAR of a federal covered adviser (the person) | State | Must register at the state level |
- The adviser may be SEC-registered (federal covered), but the individual IARs must still comply with state registration requirements
- States have jurisdiction over IARs even when the adviser itself is federally registered
- The state cannot regulate the federal covered adviser beyond requiring a notice filing, but the state still regulates the individual IARs
Think of it this way: The firm registers "up" (with the SEC), but the people register "down" (with the states).
Exam Tip: Gotchas
- An IAR of a federal covered adviser must still register with the state. The firm's federal registration does not exempt its individual representatives from state-level registration.
- There is no such thing as a "federal covered IAR." IARs always register at the state level, regardless of where their employer is registered.
Form U4
- Full name: Uniform Application for Securities Industry Registration or Transfer
- Filed through: IARD/Web CRD system (electronic filing)
- Used by: Both registered representatives (broker-dealer agents) and IARs
- Key disclosures: Employment history, disciplinary events, customer complaints, criminal history, financial disclosures
- Consent: Automatically grants consent to service of process (USA Section 414)
Exam Tip: Gotchas
- Consent to service of process is automatic upon filing Form U4. There is no separate form; filing itself constitutes consent for the state administrator to receive legal documents on the IAR's behalf.