Form ADV Annual and Material Changes Updates
You must file an annual update to your Form ADV after the end of your fiscal year. Inaccurate, misleading or omitted Form ADV disclosures is a frequently cited deficiency in SEC and state RIA examinations. During the year, if there are material changes to the information on your Form ADV, you should file an "other-than-annual" amendment within 30 days of the material change. Regulators cannot answer questions about whether a change is deemed material; however we can! We offer low cost and ADV filing services. Contact Us For HelpInvestment Advisers
The Investment Advisers Act of 1940 regulates the activities of investment advisers. Learn More About Hedge Fund Law
An "investment adviser" is "any person who, for compensation, engages in the business of advising others, either directly or through publications or writings, as to the value of securities or as to the advisability of investing in, purchasing, or selling securities." Learn More About Hedge Fund Law
You also have to look state law for clarification. For example, the definition of “investment adviser” under the Corporate Securities Law of 1968 in California has its source in the Investment Advisers Act and California law looks to SEC Release IA-1092
to aid in the interpretation of the term. Cal. Corp. Code § 25009. See also Commissioner’s Release 80-C
(May 25, 1993) and Commissioner’s Release 110-C
(April 9, 1998).Investment Advisor Representatives (IAR)
State laws define an IAR as anyone employed by or associated with a registered advisor who makes recommendations or gives advice on securities; manages client accounts; holds himself out as providing investment advice; or is compensated for soliciting clients for an advisory firm. The definition generally excludes clerical or ministerial employees, and supervised persons without a place of business in the state or who have no more than five natural person clients. Some states may impose licensing, registration, examination, or qualification requirements on IARs of SEC-registered advisory firms if the employee has a place of business in the state and has more than five clients who are individuals (natural persons) and more than 10% of his or her clients are natural persons. Some states only require the registration, licensing or qualification of IARs of a state-registered advisor if the firm has a place of business located in the state or had five or more clients residing in the state during the prior twelve months. Investment adviser representatives must pass the Series 65 Exam and be added to the registration.
Exam Requirements & Waivers
Most states require the Series 65 Exam - Uniform Registered Investment Adviser Examination. The Series 65 Exam is waived by some states if the applicant has the CFP (Certified Financial Planner), the ChFC (Chartered Financial Consultant), APFS (Accredited Personal Financial Specialist), CFA (Chartered Financial Analyst), the CIC (Chartered Investment Counselor), or other designations or items as ruled by the (state) administrator.What is the Series 65 Exam?
The Series 65 exam is designed to qualify candidates as investment adviser representatives. The exam covers topics you need to understand in order to provide investment advice to clients. The Uniform Investment Adviser Law Examination consists of 130 questions plus 10 pretest questions covering the materials outlined in the following study outline. Applicants are allowed 3 hours to complete the examination. At least 89 (68.5%) of the questions must be answered correctly for an individual to pass the Series 65 exam. Some states require the principal of the RIA to pass the exam with a score greater than 70%. The examination is conducted as a closed book test. Upon completion of the examination, the score for each section and the overall test score will immediately be made available to the candidate. The examination is administered by the FINRA. Once registered, FINRA will open a 120-day window within which you may schedule the exam.What about the Series 66 and Series 7 Exams?
An alternative to the Series 65 is the combination of the Series 7 and Series 66 exams. The Series 66 is only good in conjunction with the Series 7; most states will not sponsor a candidate for the Series 7. The Series 7/Series 66 combination is generally used by an employee of a brokerage firm who is also registering as an investment adviser. Essentially, the Series 66 equals the combination of the Series 65 and Series 63 exams. A sponsor is not required to take either the 65 or 66 exams. The Series 66 is not valid until you pass the Series 7 exam.I passed the Series 65; now what?
Just passing the exam is only the first step. You must complete the registration process before you can solicit accounts. Successful completion of the Uniform Investment Adviser Law Examination does not excuse you of the personal responsibility to know and to abide by the specific requirements of the securities laws and regulations of the states in which you conduct business. Furthermore, although successful completion of the examination may satisfy a portion of the requirements of a particular state, it does not convey the right to transact business prior to obtaining a license from the state to conduct an advisory business.