FAQ’s


Initial Registration Process

Transitioning from SEC to state registration

Registering for the Exam

Preparing for the Exam

Taking the Exam

Ongoing Compliance

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Initial Registration Process:

Who must register as an investment advisor?
Section 202 of the Investment Advisers Act of 1940 defines an Investment Adviser as any person or firm that, for compensation, (1) 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 or (2) that, for compensation and as part of a regular business, provides analysis concerning securities, must be registered as an investment advisor. There are certain exclusions from the definition, which mostly exclude individuals and firms that provide only incidental advice.
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Should I register with the SEC or the state(s)?
Under the previous regulations that ended in July 2011, investment advisors who believe they will have less than $25 million in assets under management within four months of their firm-approval must register with the state regulators. You register your firm in the state that you have your principal place of business. Once a state Registered Investment Advisor‘s assets under management exceed $30 million, they must register with the SEC. Investment Advisors who believe they will have between $25 and $30 million in assets under management within four months of their firm approval may register with the SEC.

The Financial Reform bill approved by Congress and signed into law by the President on July 21, 2010 changed the threshold for SEC registration as of July 2011. At that time, an RIA will need to have $100 million or more in regulatory assets under management in order to register with the SEC. Otherwise, you will register with the state or states in which you have a place of business or where you have a certain number of clients (see below). If you are state registered and exceed $30 million, but not $100 million, in assets under management prior to July 2011, the SEC will not require you to migrate to SEC registration. Rather, you will be able to stay state registered as if the new regulations were in effect.

There are some exemptions that enable advisors with less than $25 million in assets under management to register with the SEC.

To learn more about these exemptions, please contact us at (603) 292-6772.
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In which states do I need to file?
If you are a state registered RIA, the primary state where you file will be your home state where your office is located and where you conduct your advisory practice. As your business grows and you add clients in other states, the general rule is that you are allowed to have up to five clients in each of the other states without having to make any filings or pay any fees (unless you have a place of business in that state – in which case you need to register in that state). However, before you take on your sixth client in any state, you will need to register and be approved by the state. Four states do not recognize the five-client allowance. They are Nebraska, New Hampshire, Louisiana, and Texas. The process varies across these states, but all four require some level of registration and payment of fees right from the first client.

For SEC registered RIAs, even though the firm is registered with the SEC and the states have no supervision authority over the firm, you must “notice file” in your home state and any state in which you have a place of business or more than five clients. Notice filing is a fairly simple process of electronically sending the state a copy of your Form ADV Part 1, and paying the notice filing fee.

Note that although the SEC registers certain RIA firms, the SEC does not register the Investment Advisor Representatives (IARs) of the firms. The states can and do require registration of the IARs (with certain exceptions like New York) having a place of business within the state.
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How long does the registration process take?
The registration process, including entitlement and Form ADV filing, generally will take between six and eight weeks, depending on the complexity of the services offered by your firm and the backlog of pending applications at the various regulatory agencies. At both the SEC and state level, the regulators have between six and eight weeks from the date your application is submitted to respond to us with questions about the pending application. Our goal is to respond as quickly as possible to the regulator to help keep the process moving forward.
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What forms do I need to file?
Form ADV
Form ADV is the form investment advisors must complete in order to become registered with either the SEC or the state regulators. Form ADV explains to the regulators how you intend to run your business and your Brochure is the document you provide to your prospective clients so they too may understand how your firm operates.

Form ADV Part 1 is filed electronically through the IARD system. Firms registering with the SEC must complete Part 1A and firms registering with the state(s) must complete Part 1A and Part 1B.

The ADV Part 2A is your Brochure and the ADV Part 2B is your Brochure Supplement that you will provide to prospective clients explaining how your firm operates. Annually, you are also required to provide a copy of these documents to your existing clients as well.

Form ADV Part II and Schedule F/New Brochure (ADV Part 2A and 2B)
Individuals considering registration of a new firm should be aware that the SEC has recently made revisions to the ‘check the box’ format of the existing Form ADV Part II to require investment advisors as of 2011, who are initially registering a new firm or for firms currently registered to prepare a narrative brochure within the SEC’s new guidelines. For firms registering for the first time, that brochure will be uploaded onto the IARD system at the time your registration is submitted to the regulator. For existing firms, that brochure will need to be prepared in accordance with the new SEC rule and uploaded onto the IARD system 90 days from the firms fiscal year end in 2011. Both new and existing firms will also be required to file a Brochure Supplement on the IARD system for each of their supervised persons. There are exceptions to this requirement. Part of the SEC’s purpose of revising this document is to promote effective communication between the investment advisor and your clients. For more information about this important regulatory change, please contact us at (603) 292-6772.
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Does the SEC or States have filing requirements?
Currently, the only filing requirement for firm’s registering with the SEC is to file the Form ADV Part 1 and the ADV Part 2A Brochure through the IARD system and pay the SEC and state notice filing fees. You will also be required to register an Investment Advisor Representative with the state where your firm has its principal place of business.

For firm’s registering with the state regulators, typically, the states do have particular filing requirements. Each state is slightly different in their requirements. To learn more about how we may assist you through the registration process, please either complete the adjacent form or call us at (603) 292-6772.
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Do I need to have Written Supervisory Procedures?
Yes. The regulators require that you have in place your firm’s policies and procedures written, so that all of your employees have an understanding of how the firm is to operate as of the day your firm becomes registered. You are also required to have a Privacy Policy, Code of Ethics and Business Continuity Plan. Some investment advisors may also be subject to the Massachusetts Identify Theft requirements for their Massachusetts clients. For more information on any of these topics, please either complete the adjacent form or call us at (603) 292-6672.
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Qualifications and Exam Requirements

What exams are required to become an IAR?
To establish an investment advisory firm, all individuals involved with providing investment advice to your clients must pass a Uniform Advisor Exam or qualify for an exemption. The exam options include the Series 65 (“Uniform Investment Advisor Exam”) and the Series 66 (Uniform Combined State Law Exam). Advisor applicants who have an active Series 7 exam (no longer than 2 years unaffiliated with a broker-dealer), may opt for the Series 66 exam instead of the Series 65 exam. The Series 66 is narrower in scope and therefore less difficult.
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Do I need to be sponsored by a broker-dealer to take the Series 65 or Series 66 exam?
No. You do not need to be sponsored by a broker-dealer to take the Series 65 or Series 66 exams. These exams were developed by the North American Securities Administrators Association (“NASAA”) to test competency. The exams are only administered through FINRA.
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Are there exemptions to the Series 65 or Series 66 exam?
Yes. Certain professional designations, held in good standing and reported to FINRA, such as Certified Financial Planner (“CFP”), Chartered Financial Analyst (“CFA”), Personal Financial Specialist (“PFS”), Chartered Financial Consultant (“ChFC”) or Chartered Investment Counselor (“CIC”) will typically enable an advisor to request an exemption from the exam requirements in many states. The applicant is still required to apply for registration as an IAR by filing a Form U4 and paying the associated registration fees to the applicable state securities regulator. To discuss your unique situation, please either complete the adjacent form or call us at (603) 292-6772.
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Will my current firm be aware that I am taking this exam?
If your exam was initiated by filing a Form U-10, your current employer will not be immediately notified of your taking the examination. If your examination is prompted by a Form U-4 filing on the CRD system, your existing firm will be notified to request a transfer out of the old firm via a Form U-5. Registered Advisor Services professionals will help you to manage the timing and sequence of events to avoid premature interruption of your employment and to enable you to inform your employer before the FINRA system notifies them. To discuss your unique situation, please either complete the adjacent form or call us at (603) 292-6772. All inquiries are held in strict confidence.
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Transitioning from SEC to state registration
My firm is currently SEC registered but does not have $100 million in assets under management.  What do I do?
As previous mentioned, the Financial Reform bill signed into law by President Obama on July 21, 2010 changes the threshold for SEC registration of RIAs to $100 million or more in regulatory assets under management. If you are a mid-sized adviser registered with the SEC on July 21, 2011 you must maintain your SEC registration and comply with the Advisers Act until January 1, 2012, unless you file a “full withdrawal” on Form ADV-W to withdraw from registration in all of the jurisdictions with which you are registered (or have an application for registration pending).  However, you may not switch to state registration until after January 1, 2012.

If you are registered or have an application for registration pending with the SEC on January 1, 2012, you must file an amendment to Form ADV no later than March 30, 2012.  You must update your responses to all items including the reporting of your regulatory assets under management determined within 90 days of the filing.  If you are no longer eligible for SEC registration, you must mark the appropriate question on Form ADV.

If you are no longer eligible for SEC registration you must timely withdraw your registration by filing Form ADV-W.

For more information on this process, please complete the adjacent form, or call us at (603) 292-6772.
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Registering for the Exam
How do I register for an exam?
To register for the Series 65 or Series 66 exam, you must complete a Form U-10 and submit the form to FINRA. Submission can be either completed and paid online or printed and mailed along with a check or money order directly to FINRA.
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When can I take an exam? How long do I have to schedule the exam?
You may schedule your examination immediately following the opening of your examination window (“enrollment period”). Once FINRA processes your Form U-10, they will notify you of your enrollment period which is 120 days (4 months). Upon receipt of your enrollment confirmation from FINRA, you may contact a testing center in your area to schedule the exam. You may only take an examination once per enrollment. If you do not pass the exam, you may re-submit a Form U-10, along with the fee, for re-testing.
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How much does an exam cost?
The Series 65 exam costs $155 and the Series 66 exam costs $145. Fees are non-refundable by FINRA (FINRA administers the testing process on behalf of NASAA).
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Where can I take the exam?
There are testing facilities near all major cities and throughout the United States (and some international as well). Testing Centers are sub-contracted through Pearson Professional Centers or Prometric Testing Centers.
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What days of the week can the test be taken?
The exam can typically be taken Monday through Saturday. Contact the appropriate testing center for exact availability.
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Preparing for the Exam

What topics are covered on the exams?
The Series 65 exam consists of 130 questions (plus 10 pre-test questions) covering relevant topics around providing investment advice to clients, such as Economics, Investment Vehicles, Investment Recommendations and Strategies, and Legal and Regulatory Practices. Applicants are allowed 180 minutes to complete the examination. The Series 65 Exam Outline can be found on the NASAA.org site.

The Series 66 exam consists of 100 questions (plus 10 pre-test questions) covering relevant topics around providing investment advice to clients, such as Economics, Investment Vehicles, Investment Recommendations and Strategies, and Legal and Regulatory Practices. Applicants are allowed 150 minutes to complete the examination. The Series 66 Exam Outline can be found on the NASAA.org site.
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What study options are available?
There are several providers of training materials and classroom studies, including reference books, practice tests, and other materials. Please contact us by either completing the adjacent form or call us at (603) 292-6772.
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Taking the Exam

What score must be obtained to pass?
For the Series 65 exam, a score of 72% or greater (94 of 130 questions correct) is required to pass. For the Series 66 exam, a score of 75% or greater (75 of 100 questions correct) is required to pass. However, some states do require certain scores of up to 85% to be eligible for registration as an IAR. Note that the Series 65 exam and the Series 66 exam have 140 and 110 questions, respectively, but 10 of the questions do not count towards your scoring.  This information is updated as of January 1, 2011.
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Must I complete each question in order?
No. You have the full allotted time for each exam to complete and review the questions. You may change any answer prior to submitting your exam for completion.
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When will I know if I passed?
At the completion of the exam, the computer will display your score. Make sure you obtain a copy of your score from the testing center administrator before leaving.

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What do I need to do if I do not pass?
If you do not receive a passing score, you must file a new Form U-10 and pay the exam fee to reopen the exam window. You must schedule the new exam at least 30 days from the date of the failed exam. If you do not pass on the 3rd attempt, you must wait 180 days for re-testing.

Registered Advisor Services can assist with any of your questions, whether related to the registration process or ongoing compliance services. Please contact us at (603) 292-6772 and our experienced professionals will take you through the process so you have a good understanding of the process to begin your new advisory firm.

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Ongoing Compliance
Who is responsible for my firm’s ongoing compliance requirements?
Your Chief Compliance Officer (“CCO”) has the responsibility of monitoring and making sure your firm’s ongoing compliance requirements are met.

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How often do I need to amend my Form ADV Part 1?
Your Form ADV Part 1 needs to be amended at least on an annual basis. However, during the year if your business model changes, you may be required to amend your Form ADV Part 1 as well as your ADV Part 2A Brochure and/or ADV Part 2B Brochure Supplement.


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How do I file an amendment to my Form ADV Part 1?
You file all amendments to your Form ADV on the Investment Advisor Registration Depository (“IARD”) system.

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Do I have to amend my Form ADV Part 2A Brochure and/or ADV Part 2B Brochure Supplement?
You are required to perform an annual review of your Form ADV Part 2A and Part 2B to be certain the information is still current. If your business model changes after your annual review, you would need to amend your document as well.

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Are there any annual filing requirements?

Annually, you are required to submit an annual updating amendment to your Form ADV Part 1 on the IARD system. As previously stated, you are also required to review and update your Form ADV 2A Brochure and Form ADV 2B Brochure Supplement.  Those documents are required to be filed on the IARD system.  Filing requirements for the Form ADV 2B Brochure Supplement vary for SEC registered investment advisors.


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Do I have to file anything if my firm hires an individual to provide investment advice to clients?
Most states require firms to file a Form U4 for your Investment Advisor Representatives (“IAR”) who will be providing investment advice to your clients. This is true for both state and SEC registered investment advisor firms.

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I need to schedule an exam for an individual in my firm, how do I do this?
You can open a window to schedule an exam for an individual by checking the appropriate exam on the Form U4 for the individual and paying the exam fee to your firm’s daily account. The Form U4 will need to be submitted on the CRD system.

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Do I have to review my compliance policies and procedures?
Yes. Investment Advisors are required to test and review their policies and procedures on an annual basis in an effort to confirm that any risks have been addressed and mitigated and that the firm’s policies and procedures are still current and appropriate for the size and scope of the firm.

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Are there any required documents that I need to keep for my firm?
Investment Advisors are subject to the books and records requirements of either the Investment Advisers Act of 1940 for SEC registered advisors; or, subject to the state requirements of their home state where their firm is currently registered.
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To learn more information about any of these topics and other important ongoing compliance requirements, please either view our ongoing compliance section, or contact us at (603) 292-6772.