A Few Important Things About Investment Adviser Registration
As people are getting increasingly busy in their everyday life, remembering all the rules and regulations associated with compliance and registration services is also getting more and more difficult. In order to efficiently solve the problem a growing number of individuals are now opting for investment adviser compliance services and also RIA or registered investment advisers. Offering a rapid and comprehensive investment adviser registration service to BDs, RIAs and others a number of compliance consulting companies are now making the entire process of registration easier for their clients and also saving their precious time by efficiently and professionally dealing with the complicated rules and regulations.
The RIA registration system had almost completely revamped the industry scenario as earlier advertisers were required to mandatorily register with both SEC or Securities and Exchange Commission and their respective states. But now investment advisers are required to register either with the states or the Securities and Exchange Commission. It is also important to note that it has been implemented only for the purpose of registration requirement and both the states and the Securities and Exchange Commission are still responsible over the advisers’ activities for maintaining their jurisdiction.
If you are looking to work as an investment financial adviser – there are two basic approaches that you can choose from. The first one of them is getting you sponsored by a broker dealer for RIA registration and become a stock broker or you can also directly register with the SEC and start operating as an investment adviser. There are many asset managers and investment planners who consider registering with the Securities and Exchange Commission as a better choice for avoiding the often too rigid investment adviser compliance rules and regulations strictly followed by the broker-dealers.
The first step of investment adviser registration process requires an aspiring financial adviser to qualify the Uniform Investment advisor Law exam administered by FINRA. Students are required to score in excess of 72% in order to qualify the exam and in order to become a registered RIA no other qualification is required. After qualifying the exam candidates can proceed with the registration process and require creating an account with the Investment Adviser Registration Depository. The depository is managed by FINRA on behalf of the states and the Securities and Exchange Commission. After opening the account the adviser is provided with a CRD number and his personal account ID information.
A good number of investment advisers opt for RIA registration with the SEC for then they can structure their individual practices with much better freedom. Advisers who work for broker-dealers are bound to pay a percentage of their earning for their back office support and investment adviser compliance and this frequently turns into a over bearing for the practicing brokers and advisers. Though usually investment advisers’ work on commission but a good number of them also offer their services against a hourly fee or work with other discount brokers or investment firms for better administration and record keeping.
About The Author
Tom Mason works is an investment banker by profession. He also offers consultancy on various investment related topics through the various articles that he writes and shares online and other online forums. He specializes in investment adviser registration services amongst others.