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Becoming a Financial Advisor in New York

To become a financial advisor in New York, you’ll need to register an independent investment adviser (IA) firm or secure employment as an investment adviser representative (IAR) with an established New York-registered IA. As a proprietor of a state level IA, you’ll operate under the regulatory authority of the New York Office of the Attorney General, Investor Protection Bureau. If you qualify for federal registration, you’ll register with the Securities & Exchange Commission (SEC). This step-by-step guide will provide detailed instructions for both state and federal level registrants.

As the principal of a New York-registered IA, you, your firm, and all it’s representatives will be required to operate in strict accordance with New York Securities Law, known as the Martin Act, and the New York Investment Advisory Act.

Step 1. Get Your Education

  1. The Investment Adviser Public Disclosure (IAPD) database maintains educational background information on all registered investment advisors. Professionals with specialized degrees related to accounting, business, and finance provide the majority of investment advisory and portfolio management services. Several examples of specialized degrees are listed here:

    • BA or BS -Accounting
    • BA-Consumer and Family Financial Services
    • MBA-Accounting and Finance or simply Finance
    • MS-Accounting, Personal Financial Planning, or Finance
    • PhD-Accounting or Finance

  2. Courses that will be highly relevant to your work as an investment adviser:

    • Accounting
    • Computer information systems
    • Finance
    • Marketing
    • Behavior of groups, persons, and organizations
    • Statistics
    • Management
    • Ethics in business
    • Quantitative applications applied to business
    • Business communications
    • Business law
    • Economics
    • Taxation
    • Behavior of groups, persons, and organizations

  3. It’s always important to highlight your education and experience and there are elective professional certifications that can help you in doing this. Although state and federal registration do not require independent advisors and IARs to have one of these certifications, state and federal regulatory authorities will waive exam requirements if you hold one. Eligibility requirements for one of these designations often include a bachelor’s degree or a number of years of industry experience:

    • Personal Financial Specialist (PFS)
    • Chartered Investment Counselor (CIC)
    • Certified Financial Planner (CFP)
    • Chartered Financial Analyst (CFA)
    • Chartered Financial Consultant (ChFC)

Step 2: Register Your Firm in New York

(This step is only applicable if you are interested in establishing your own IA firm. If you will start your career by working with an established firm, skip to Step 3.)

As a new advisor, you will be required to complete your registration process through the Financial Industry Regulatory Authority (FINRA)-administered Investment Adviser Registration Depository (IARD). Both state registration with the New York Investor Protection Bureau and federal registration with the Securities and Exchange Commission (SEC) are processed through this system.

If you elect to manage more than $100 million client assets then your firm will be registered at the federal level with the SEC. If you’ll manage client assets that total less than $100 million, you will register your IA at the state level only. The following details the process for both state and federal registrants.

  1. Submit hard copy Entitlement Forms, which will give a representative of your firm who you have designated as Super Accountant Administrator (SAA) access to all FINRA Web-based systems, including the IARD system. The SAA will access the firm Gateway to complete all other state and federal registration requirements.
  2. Fund the IARD User Account. This account will be used to pay all required registration fees, IAR registration and testing fees, as well as state filing fees:

    • FINRA administrative $40 initial filing fee for state-registered firms managing less than $40 million in client assets
    • FINRA administrative $150 initial filing fee for mid-level state-registered firms managing between $25 million and $100 million in client assets
    • FINRA administrative $225 initial filing fee for SEC-registered advisors, which include firms with over $100 million in assets under management
    • $200 initial state firm filing fee charged by New York
    • Exam fees for each IAR that will be in the firm
    • There is no initial state IAR filing fee charged by New York for an IAR that will be employed by the firm

  3. Submit an electronic version of Form ADV. This form outlines your new IA firm’s investment philosophy, background of investment advisors in your employ, and fee structure.
  4. Each investment advisor representative (IAR) in the firm is required to complete a U-4 Uniform Application for Securities Registration or Transfer form. As a firm principal, you will be required to submit the Form U-4 for yourself as well. Form U-4 is submitted through the Central Registration Depository (CRD).
  5. A balance sheet must be sent to New York State Department of Law, Investor Protection Bureau, Investment Advisory Unit, 120 Broadway 23rd Floor, New York, NY 10271.

    The state requires that you add this statement: “I do hereby certify that this is a true and complete financial statement” with an authorized signature. Alternatively, you can attach a CPA Audit report.

Step 3: Take the Required Exam

The state of New York and the SEC have the ability to waive exam requirements for firm principals and representatives that have completed one of the five professional designation programs listed here:

  • Chartered Financial Consultant (ChFC)
  • Chartered Investment Counselor (CIC)
  • Chartered Financial Analyst (CFA)
  • Certified Financial Planner (CFP)
  • Personal Financial Specialist (PFS)

To request a waiver in the state of New York submit an Investment Advisor Qualification form.

  1. New York’s requires that all investment adviser representative candidates register for and complete one of the following exams:



    OR

    Individual registration and exam applications are submitted through the Central Registration Depository using one of these forms:

    OR

  2. Upon approval of application, the exam(s) will be scheduled through one of the Prometric or Pearson Professional Center testing locations in New York. You must schedule the exam(s) within 120 days of registration.
  3. Check in with the testing center one hour before your exam time on the proper day.
  4. Exam scores are distributed immediately after the exam is complete.

Step 4: Ongoing Renewal and Update Requirements in New York

Investment Advisor Firm updates through the Investment Adviser Registration Depository:
Annual updates to the ADV will always be required in order to reflect any changes to your firm’s fees, or employment status changes for advisers in your firm’s employ. License renewal actions must be completed by December 31st every year, and are processed through the Investment Advisor Registration Depository. Expect the following fees to apply

  • IARD administrative fees of $100
  • New York’s renewal fees are $200 for the firm. There are no registration fees charged for IARs in the firm’s employ.
  • Renewal fees are paid for all states where the firm is registered
Investment Adviser Representative updates through the Central Registration Depository:
IARs are required to maintain their own Form U-4 by alerting the firm’s compliance department. As a firm principal, you will update your own Form U-4. The items listed below are considered amendments that will require Form U-4 updates:
  • Additional business activities
  • Education
  • Jurisdictional changes
  • Certification
  • Civil judgments
  • Residential address
  • Criminal record
  • Name change (marriage
  • Customer complaints
  • Disciplinary action