Becoming a Financial Advisor in Arizona

If you’re interested in becoming a personal financial advisor in Arizona, you’ll either do so by becoming an investment adviser representative (IAR) who works for an existing firm, or you’ll go independent by establishing an investment adviser (IA) firm of your own. As a state level registrant, you would register your firm with the Arizona Corporation Commission, Securities Division, and as a federal level registrant you would register your firm with the Securities and Exchange Commission (SEC).

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This easy to follow guide will take you through individual IAR registration requirements, as well as federal and state level requirements for a new IA firm.

All investment adviser firms, principals, and employees engaging Arizona residents operate under the articles of the Investment Management Act of Arizona.

Step 1. Get Your Education

  1. Potential employers will always weigh your education heavily. If you plan to open your own firm, your education will be described in the Investment Adviser Public Disclosure (IAPD) industry database and can easily be reviewed by potential clients. Almost all financial advisers in Arizona have earned at least a bachelor’s degree. Success as a financial adviser is possible with a degree in any field, but it is definitely helpful to have a specialized degree:
  • BA-Consumer and Family Financial Services
  • BA -Accounting
  • BS-Accounting
  • MS-Personal Financial Planning,
  • MS-Finance
  • MS-Accounting
  • MBA-Finance
  • MBA-Accounting and Finance
  • PhD-Finance or Accounting
  • No matter what degree you decide to pursue, there are some classes you can take that will prepare you for the challenges of being a financial adviser. Among these are:
  • Marketing
  • Business ethics
  • Computer information systems
  • Management
  • Accounting
  • Business law
  • Taxation
  • Finance
  • Economics
  • Business communications
  • Statistics
  • Quantitative applications in business
  • Behavior of organizations, persons and groups
  • Elective certifications and professional designations are also helpful in advancing your career as an adviser. The different available certifications will each have unique eligibility requirements and many include a formal education requirement, such as a bachelor’s degree, or a minimum amount of experience in business and financial services. Although the pursuit of these designations is purely elective, exam requirements will be waived if you hold one the following:
  • Chartered Financial Analyst (CFA)
  • Certified Financial Planner (CFP)
  • Chartered Investment Counselor (CIC)
  • Personal Financial Specialist (PFS)
  • Chartered Financial Consultant (ChFC)

Step 2: Register Your Firm in Arizona

(If you will begin your career as an investment adviser representative (IAR) for an existing firm, skip to Step 3)

If your firm will manage less than $100 million in client assets, it will be registered at the state level with the Arizona Corporation Commission Securities Division. If managing in excess of $100 million, your firm will qualify for federal-level registration with the Securities and Exchange Commission (SEC). Both state and federal level firms process registration through the Investment Adviser Registration Depository (IARD), as is described here.

  1. Complete and submit Entitlement Forms to designate a Super Accountant Administrator (SAA). Upon approval of Entitlement, the SAA will be able to access the FINRA Firm Gateway and complete the remaining steps.
  2. Create and Fund the general user account so as to cover the fees associated with establishing a new IA in Arizona:
  • $40 Arizona registration fee for each IAR your firm employs
  • $250 Arizona registration fee for your firm
  • Exam fees applicable to each new IAR being registered
  • Complete and Submit Form U-4 Uniform Application for Securities Registration or Transfer for each IAR you employ. As a sole proprietor or founding principal of an LLC, you are recognized as a representative and will be required to submit the Form U-4 for yourself.
  • Complete and submit Form ADV. This form provides information about the new IA firm that will be pertinent to regulators and prospective clients, including your investment philosophy and fee structure.
  • Send the following directly to Arizona Securities Division, 1300 W. Washington St. 3rd Floor, Phoenix, AZ 85007.
  • If your firm will hold custody of client securities, you will need to send an audited balance sheet.

Requirements to Transact Business in Other States

Registration in Arizona includes the ability to conduct some business in other states. You can work with as many as 5 clients in any other single state without having to register in that state. After adding a fifth client in any other one state, you will need to meet the registration requirements of that new state, including paying all applicable registration fees.

Step 3: Take the Required Exam(s)

The Arizona Corporation Commission, Securities Division and the Securities and Exchange Commission (SEC) waive exam requirements if you have earned any of the following professional designations:

  • Chartered Financial Analyst (CFA)
  • Certified Financial Planner (CFP)
  • Chartered Investment Counselor (CIC)
  • Personal Financial Specialist (PFS)
  • Chartered Financial Consultant (ChFC)
  1. Register for and complete one of the following:

OR

Register for the exams by using one of these forms:

OR

  • Form U-10, the Uniform Examination request for non-FINRA Members, which is an exam-only application for non-FINRA member firms. This is used when required by another SRO or regulatory authority to take the Series Exam(s). When using Form U-10 to apply for exams, you still need to formally register within two years of the exam completion date by using Form U-4.
  • All exam(s) will be scheduled through a Prometric or Pearson Professional Center testing locations in Arizona. You must schedule the exam(s) within 120 days of registration.
  • Check in with the testing center one hour before your exam time on the scheduled day.
  • Exam scores are distributed immediately after the exam is complete.

Step 4: Ongoing Annual Renewal Requirements

Investment Advisor Firm:
As a firm principal or acting Super Account Administrator, you’ll be required to perform annual updates to your Form ADV and pay all annual renewal fees through the Investment Adviser Registration Depository (IARD). The annual renewal fee in Arizona is $250 for the firm and an additional $40 is required for each licensed individual representative. Registration renewals must be completed by December 31st and will require IARD administrative fees of $100.

Investment Adviser Representatives:
Form U-4 must be updated regularly for all investment adviser representatives. If you are a firm principal with Super Account Administrator authority, you will update your own files. If you are a firm employee, you will notify your compliance department of the need to update or amend information. The items listed below should be updated if changes occur:

  • Education
  • Jurisdictional changes
  • Certification
  • Residential address
  • Criminal record
  • Name change
  • Customer complaints
  • Civil judgments
  • Disciplinary action
  • Additional business activities