Becoming a Financial Advisor in Hawaii

If you are interested in becoming a financial advisor in Hawaii, you will make the choice to either establish a new investment adviser (IA) firm or become registered as an investment adviser representative (IAR) with a firm already registered to serve the residents of Hawaii. Follow this step-by-step guide to learn how to become an IAR or register a new firm at the state level with the State of Hawaii Department of Commerce & Consumer Affairs, Securities Compliance Branch or at the federal level with the Securities and Exchange Commission (SEC).

You, your new investment adviser firm, and all representatives of your firm will operate in compliance with the State of Hawaii Department of Commerce & Consumer Affairs, Securities Compliance Branch statutes and regulations.

Step 1. Get Your Education

  1. Your education is everything when starting out as a new investment adviser firm principal or investment adviser representative. Your educational background will be easily accessible to potential clients through an online, Investment Adviser Public Disclosure (IAPD) national registry.

    Degrees that will prepare you to become a financial advisor include:

  • BA-Accounting
  • BS-Accounting
  • BA-Consumer and Family Financial Services
  • MS-Accounting
  • MS-Personal Financial Planning
  • MS-Finance
  • MBA-Accounting
  • MBA-Finance
  • MBA-Accounting and Finance
  • PhD-Accounting
  • PhD-Finance
  • Relevant courses that will likely be part of your degree program include:
  • Management
  • Accounting
  • Marketing
  • Computer information systems
  • Taxation
  • Statistics
  • Quantitative applications in business
  • Business ethics
  • Business law
  • Economics
  • Behavior of organizations, persons and groups
  • Business communications
  • Finance
  • Specialized professional certification programs will help to highlight the specific skills that you have as an advisor. You will have to meet certain eligibility requirements to earn these designations, which include either a significant amount of dedicated financial services industry experience or a minimum level of formal education, usually a bachelor’s degree. Holding one of these voluntary specialized certifications will allow you to be exempt from further examination typically required of investment adviser firm principals and representatives:
  • Chartered Financial Consultant (ChFC)
  • Chartered Financial Analyst (CFA)
  • Chartered Investment Counselor (CIC)
  • Personal Financial Specialist (PFS)
  • Certified Financial Planner (CFP)

Step 2: Register Your Firm in Hawaii

(This step is only applicable if you will be starting your own independent IA firm. If you will be working for an established firm, skip to Step 3)

Relatively small investment advisers, those mostly offering their services to local clients living in Hawaii and managing assets totaling less than $100 million, will register at the state level with the Hawaii Department of Commerce & Consumer Affairs Securities Compliance Branch. If you are going to be managing assets totaling more than $100 million, you will be under the regulation and authority of the Securities and Exchange Commission (SEC). In both cases, registration is processed through the Investment Adviser Registration Depository (IARD). The following steps apply to both state and federal level registrants.

  1. Start by initiating the Entitlement Process by submitting hard copy Entitlement Forms to the address noted on the form. This process creates authorized access to FINRA’s Web-based systems. Upon approval of Entitlement, the will be able to access the FINRA Firm Gateway and complete the following steps.
  2. A CRD general account will be needed to fund assorted registration fees, state filing fees, and IAR registration and testing fees:
    • For new firms with less than $25 million in assets under management, the initial IARD fee is $40
    • For new firms with between $25 million and $100 million in assets under management, the initial IARD fee is $125
    • For new firms managing more than $100 million in assets, the initial IARD fee is $225
    • Annual filing fees in Hawaii are $100 per firm,
    • A fee of $50 for each IAR employed by the firm and licensed to offer advice is also required.
  3. Submit the Form U-4, Uniform Application for Securities Registration or Transfer For each investment adviser representative (IAR) that will be working with the firm. This will be submitted through the Central Registration Depository (CRD).
  4. Submit Form ADV, which is an SEC form detailing your firm’s investment fee structure and philosophy, the background of investment advisers, and other important information clients and potential clients will need. Form ADV is filed through the IARD. Registration requirements for the state of Hawaii will be done by selecting Hawaii as the state the firm will do business in.
  5. Submit directly to the State of Hawaii, Business Registration Division, Department of Commerce and Consumer Affairs, 335 Merchant Street, Room 203, Honolulu, Hawaii 96813:
    • Copies of any investment advisory agreements, contracts, and brochures that will be used with clients
    • If you will hold client assets, a $50,000 surety bond
    • Certified financial statements submitted with a Verification statement

Step 3: Get Your Registered Investment Adviser License in Hawaii by Taking the Required Exam

The SEC and the State of Hawaii will both waive the Series 65 exam requirements if you hold at least one of the following professional designations:

  • Personal Financial Specialist (PFS)
  • Chartered Financial Consultant (ChFC)
  • Chartered Investment Counselor (CIC)
  • Certified Financial Planner (CFP)
  • Chartered Financial Analyst (CFA)
    1. Your employing firm will help you complete the test application Form U-4 Uniform Application for Securities Registration or Transfer. Your employing firm will submit it through the Central Registration Depository. As a firm principal, you will submit Form U-4 for yourself

When your exam application has been approved you will be notified to register for one of the following:

OR

Step 4: Ongoing Renewal and Update Requirements in Hawaii

Investment Advisor Firm:
Investment Advisor Firm Updates and Renewals Through the Investment Adviser Registration Depository

  • Investment adviser firm registration renewals for Hawaii are done online through the IARD
  • License renewals need to be completed by December 31st each year
  • Hawaii ’s renewal fees are $100 for the firm and $50 for each IAR within the firm (IAR fees paid through the CRD)
  • Additional renewal fees will be paid for all states that the firm and its reps are registered in
  • Additional administrative fees of $100 per year are paid to the IARD
  • Annual updates to the ADV are required

Investment Adviser Representatives:
Investment adviser representatives are required to keep their Form U-4 current and updated. If you are a sole proprietor or firm principal, you will need to make these updates yourself. As an employee of a firm, you will need to work with the compliance team within your firm to make any required changes. The occurrence of or changes to any of the items below will require a Form U-4 update to be done within 30 days:

  • Civil judgments
  • Education
  • Certification
  • Disciplinary action
  • Customer complaints
  • Jurisdiction changes
  • Residential address
  • Name change (including those due to marriage)
  • Additional business activities
  • Criminal record