Investment Advisor Licensing
Businesses and individuals who provide investment advice are subject to regulation by federal and state authorities. The regulatory requirements and applicability must be determined before a prospective advisor can provide services. Navigating the appropriate registration and/or license(s) is a tedious process and can detract from your core business purpose. LicenseLogix will help each prospective advisor determine the specific requirements, and how to meet each of them before filing any application.
Each state has its own statutes and regulations governing the operation and registration of investment advisors. The investment advisor firm holds the registration/license. Investment advisors are regulated either by the SEC or by the States, depending on the amount of assets they maintain. If an investment advisor does not meet the SEC standard for registration, they generally must register with their home state and any other state in which they do business.
The main document in the registration of an investment advisor is Form ADV – a 78 page application. All advisors must register with the SEC and the States electronically through IARD, a secure Internet based data system. The SEC processes registrations in 45 days, but each state has different processing times. In addition to the ADV, states may require a passing score on a competency examination for each individual acting as an investment advisor, payment of a fee for processing the applications, a bond or minimum net capital and certain other disclosures about the firm. Investment advisors must renew their registration/license annually.
Ramifications of Non-Compliance
The penalties for practicing as an investment advisor without the proper licensing ranges based on the type of misconduct and the state, but both civil and criminal penalties may apply.
How we help your business:
- We streamline the overwhelming task of becoming properly licensed. Our licensing specialists will determine the necessary registrations, compile applications and make sure your business receives the license.
- We save you time. Our experts understand the investment advisor industry and can quickly complete what is required to get your business properly licensed.
- We save you money. Don’t expose your business to unnecessary fines and tarnishes. Get properly licensed without fear of falling in noncompliance.
More Resources:North American Securities Administrators Association
Investment Advisor Registration Depository
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