What is an Investment Adviser Representative?

An Investment Adviser Representative (IAR) is a financial professional who provides fee-based advice to clients about investment decisions.

Most states require investment adviser reps to register or become licensed. These investment professionals share similar responsibilities. They provide advice by making direct recommendations to clients and by performing research on securities and securities markets.

Job Description

Investment adviser reps are responsible for providing investment advice and planning strategies for clients by assessing the client’s current and future financial needs and objectives. These requirements are met by providing financial advice and recommending investment products. They meet assigned revenue goals by creating financial strategies for clients and profiling which investment products are best for the client. They must accurately complete and submits detailed documentation within designated deadlines. Investment adviser reps must follow specific procedures for different client accounts and transactions. They must also follow official regulatory policies and compliance procedures.

Required Skills

Most employers will expect investment adviser reps to have two to three years of sales experience in the securities or financial industries. They will need to have a solid track record of professional success that is demonstrated through relationship-building skills, the ability to think critically and use sound judgment and a firm commitment to establishing long-term clients. Investment adviser reps are expected to be confident with a resilient personality, enthusiasm for their work and a strong desire for performance driven compensation.

Licensing and Qualifications

Investment adviser reps must first pass the Series 65 exam, which falls under the uniform investment advisor law. This exam is administered by FINRA, but test takers are not required to be sponsored by an organization like other similar securities exams. There are questions regarding federal securities laws, professional ethics and topics related to investment advice. The text contains 140 multiple choice questions. Test takers are allotted three hours to take the exam and must earn at least a 72 percent grade to pass. Although no other licensure is required to become an investment adviser reps, almost all find it difficult to secure clients with additional qualifications. Most states actually allow advisors who carry certain designations to automatically pass the exam. These include Certified Financial Planner, Personal Financial Specialist and Chartered Financial Analyst.

Federal and State Registration

The next step to become an investment adviser rep is to register with the SEC or the state in which business will be conducted. Certain professions are exempt from this requirement is the provision of providing investment services and advice is part of their existing business. This includes bankers, attorneys, professors, accountants, publishers and broker-dealers. Employees who exclusively work with U.S. government securities or those who are registered with the Commodity Futures Trading Commission are also exempt. Any individual who manages over $100 million in assets must register with the SEC and most states require investment adviser reps who deal with smaller asset bases to register.

The Registration Process

Investment adviser reps must first create an account with Investment Adviser Registration Depository (IARD). This is managed by FINRA for the SEC and most states. Advisors who work in the few states that do not require registration do not have to use the IARD. Once a new account is open, FINRA supplies the advisor with a CRD number and account ID. The investment adviser rep can then file Form ADV and the other U4 forms through the system. The Form ADV is the primary document used by the SEC for the application process. It contains multiple sections that all must be completed by hand, but the first section is submitted online.

To learn more about becoming an Investment Adviser Representative, visit the U.S. Securities and Exchange Commissions’ Investment Adviser Registration Depository (IARD) website.

You might also like: Top 10 Best Online MBA Programs