11.3 Investment Adviser Representative Registration
Key Takeaways
IARs are individuals who provide investment advice on behalf of an IA.
IARs must pass the Series 65 (standalone) or Series 66 (with Series 7).
Approved designations (CFP, ChFC, MSFS, CFA, PFS, CIMA) can replace the Series 65 in most states, never the Series 66.
IARs register in states where they have a place of business or clients.
Clerical and ministerial employees are NOT IARs.
Form U4 is filed through CRD for IAR registration.
IARs must be properly supervised by the investment adviser.
Dual registration as IAR and agent is common for Series 7 + 66 holders.
Investment Adviser Representatives (IARs) are the individuals who provide investment advice on behalf of investment advisers.
Definition of IAR
An IAR is any individual who represents an investment adviser in:
- Making investment recommendations
- Managing client accounts
- Determining what advice will be given
- Soliciting or negotiating advisory business
- Supervising employees who do any of the above
Who is NOT an IAR?
These individuals are excluded from the IAR definition:
| Exclusion | Reason |
|---|---|
| Clerical employees | Perform only administrative functions |
| Ministerial employees | Handle back-office tasks only |
| Employees without client contact | No advisory function |
| IARs of federal covered advisers | A state may register only those with a place of business in that state |
Clerical vs. Advisory Functions
| Clerical (NOT IAR) | Advisory (IS IAR) |
|---|---|
| Scheduling appointments | Making investment recommendations |
| Processing paperwork | Discussing investment strategies |
| Answering general questions | Providing specific advice |
| Data entry | Portfolio management |
| Filing documents | Soliciting new clients |
Qualification Requirements
Exam Requirements
| Exam | Qualifies For | Prerequisites |
|---|---|---|
| Series 65 | IAR only | None |
| Series 66 | State agent + IAR credit | SIE and Series 7 corequisites |
| Series 7 + 66 | IAR + Registered Rep | SIE corequisite |
| Series 7 + 65 | IAR + FINRA registration (most states also require the Series 63 for agents) | SIE corequisite |
Series 65 vs. Series 66
| Feature | Series 65 | Series 66 |
|---|---|---|
| Questions | 130 scored | 100 scored |
| Time | 180 minutes | 150 minutes |
| Passing score | 92 of 130 | 73 of 100 |
| Prerequisite | None | None (SIE and Series 7 corequisites) |
| Best for | Fee-only advisers | Dual registrants |
Professional Designation Waivers
Most states accept these designations in place of the Series 65 (NASAA's list, updated May 2024). A designation never waives the Series 66.
| Designation | Full Name |
|---|---|
| CFP | Certified Financial Planner |
| ChFC | Chartered Financial Consultant |
| MSFS | Master of Science in Financial Services |
| CFA | Chartered Financial Analyst |
| PFS | Personal Financial Specialist |
| CIMA | Certified Investment Management Analyst |
Important: Designations must be current and in good standing. Check each state's rules.
Registration Process
Form U4
IARs register through the Central Registration Depository (CRD) by filing Form U4.
| U4 Section | Information Required |
|---|---|
| Personal data | Name, address, SSN, date of birth |
| Employment history | Previous 10 years |
| Residence history | Previous 5 years |
| Disclosure questions | Criminal, regulatory, financial |
| Arbitration history | Customer disputes |
| Fingerprints | Background check |
State Registration Requirements
IARs must register in states where they:
- Have a place of business
- Have clients (subject to de minimis)
- Solicit new business
De Minimis Exemption for IARs
IARs may avoid registration if:
- No place of business in the state
- 5 or fewer clients in the state
- Don't hold out as IAR in that state
Supervision Requirements
Investment Adviser's Obligations
| Obligation | Description |
|---|---|
| Written procedures | Supervisory policies must be documented |
| Designated supervisor | Principal responsible for IAR oversight |
| Regular review | Periodic review of IAR activities |
| Compliance training | Ongoing education requirements |
| Record of supervision | Document supervisory activities |
IAR Responsibilities
IARs must:
- Act within their registration
- Follow firm policies
- Maintain required qualifications
- Report material changes to employer
- Comply with state and federal rules
Dual Registration
Many professionals hold both:
- IAR registration (investment adviser representative)
- Agent registration (broker-dealer representative)
Common Dual-Registrant Scenarios
| Role | Registration Required |
|---|---|
| Selling mutual funds + providing advice | Agent + IAR |
| Wrap fee program representative | Agent + IAR |
| Financial planner at BD | Agent + IAR |
Exam Combinations for Dual Registration
| Combination | Qualifies For |
|---|---|
| SIE + Series 7 + Series 66 | Agent + IAR |
| SIE + Series 7 + Series 63 + Series 65 | Agent + IAR |
| SIE + Series 6 + Series 63 + Series 65 | Limited Agent + IAR |
Termination and Transfer
When IAR Leaves a Firm
| Party | Action Required |
|---|---|
| Former employer | File Form U5 within 30 days |
| IAR | May respond to U5 disclosures |
| New employer | File Form U4 before activities begin |
Continuing Education
While IARs don't have FINRA CE requirements, many states require:
- Product training updates
- Ethics training
- Regulatory updates
- Compliance training
Exam Tip: Series 65 is standalone; registering with the Series 66 also requires the SIE and Series 7 (corequisites). Know which professional designations can waive exams (CFA, CFP are most common). IARs register through Form U4 via CRD.
Which exam combination qualifies an individual as both a registered representative AND an investment adviser representative?
Series 65 only
Series 66 only
SIE, Series 7, and Series 66
Series 63 and Series 65
An employee at an investment adviser firm schedules client meetings and processes account paperwork. This employee:
Must register as an IAR
Is excluded from IAR registration as clerical
Must pass the Series 65 exam
Requires a professional designation waiver
Which professional designation can replace the Series 65 exam in most states?
MBA (Master of Business Administration)
CPA license alone
CFA (Chartered Financial Analyst)
JD (Juris Doctor)
When an IAR terminates employment with an investment adviser, the former employer must:
File Form ADV-W within 30 days
File Form U5 within 30 days
File Form U4 within 30 days
Notify the SEC within 5 business days
Sections you finish are checked off in the contents.