If you’re interested in becoming a financial advisor in Iowa, this step-by-step guide will provide instruction on how to register a new investment adviser (IA) firm of your own, as well as how to register as an investment adviser representative (IAR) so as to work for an existing firm. Included in this guide are details on the state level registration process through the Iowa Securities and Regulated Industries Bureau as well as the federal level registration process through the Securities & Exchange Commission (SEC).
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The Iowa Uniform Securities Act applies to all investment adviser (IA) firms, investment adviser representatives (IARs), and firm principals with clients residing in Iowa.
Step 1. Get Your Education
- Pursue a degree. Successful investment advisers often have a bachelor’s or graduate degree from an accredited university. As an adviser, your educational credentials are made available to clients and regulators through the Investment Adviser Public Disclosure (IAPD) database. Potential clients place a lot of importance on education as they consider who to entrust with their financial assets.
A few of the degree programs worth considering:
- PhD-Accounting or Finance
- MS-Accounting, Personal Financial Planning, or Finance
- MBA-Accounting and Finance or Finance
- BA or BS -Accounting
- BA-Consumer and Family Financial Services
- Enroll in the right courses. Even without pursuing one of these specialized degrees, your education can provide you with the knowledge you’ll need to offer the best possible recommendations to your clients. Some of the courses that can help you in your career include:
- Business ethics
- Computer information systems
- Behavior of organizations, persons and groups
- Statistics Accounting
- Business communications
- Quantitative applications in business
- Business law
- Consider voluntary certification. There are strict eligibility requirements that must be met before you can attempt the exams that lead to professional certification. Requirements often include either a four-year degree at minimum or an equivalent level of financial industry experience. Although certification is not required to become registered as an investment adviser, you’ll be exempt from additional series exam requirements typically required by the SEC and the Iowa Securities and Regulated Industries Bureau if you hold one of these designations:
- Chartered Investment Counselor (CIC)
- Chartered Financial Consultant (ChFC)
- Chartered Financial Analyst (CFA)
- Personal Financial Specialist (PFS)
- Certified Financial Planner (CFP)
Step 2: Register Your Firm in Iowa
(This step is only required if you are interested in establishing your own IA firm. If you intend to begin your career working with an existing firm, skip to Step 3)
If your firm will manage or have discretionary authority over more than $100 million in client assets, you will be required to register with the federal Securities and Exchange Commission (SEC). State level registration through the Iowa Securities and Regulated Industries Bureau applies to firms that manage less than $100 million in client assets. This guide will describe how registration is processed through the Investment Adviser Registration Depository for both state and federal level IAs.
- Complete and submit Entitlement Forms for your new investment adviser firm so as to be allowed access to the IARD system. Entitlement Forms will be submitted as hard copies by fax or mail to the fax number/address noted on the forms. Your designated Super Accountant Administrator (SAA) will be notified by email when access to the Firm Gateway has been granted. By accessing the Firm Gateway, the remaining steps can be completed.
- Fund the IARD User Account. IA firm registration fees in Iowa include:
- New firms with over $100 million in assets under management must pay an initial fee of $225
- Initial filing fees in Iowa are $100 for the IA firm
- Initial filing fees in Iowa are $30 for each IAR you employ
- Complete and submit Form U-4, Uniform Application for Securities Registration or Transfer for each of the investment adviser reps you employ. If you will be operating your firm as a sole proprietorship, submit Form U-4 for yourself just as you would for an employee.
- Complete and submit Form ADV electronically through the IARD. Check the box for Iowa as the state in which you’ll be soliciting and engaging clients.
Transacting Business in Other States under the De Minimis Exemption
Once you are registered in Iowa, your firm will be permitted to conduct a minimal amount of business in another state without having to meet the registration requirements set by that state. A minimal amount of business usually means as many as four clients. When you add a fifth client in any other one state, you will need to register your firm in that state through the IARD system. You will also need to pay the fees required to register in that state.
Step 3: Take the Required Exams
- Apply for the required exam(s) by completing Form U-4, Uniform Application for Securities Industry Registration or Transfer. The Super Account Administrator will submit this on your behalf through the IARD system along with the initial $30 filing fee.If you are not currently associated with an IA, apply for the non-sponsored exams (Series 65 or Series 66) using Form U-10, Uniform Examination request for non-FINRA Members. This is an exam only application for non-sponsored exams. If the Form U-10 is used, formal state/federal registration is still required using Form U-4 within 2 years of receiving a passing exam score in order to work.
- You will receive specific registration instructions related to the required exam(s). You will be required to take one of the following as determined by your employer:
- Series 7, General Securities Representative Examination (requires sponsorship) in combination with the Series 66, Uniform Combined State Law Examination
- You will be notified by email of your eligibility to schedule exam(s), at which point you’ll do so through one of the Prometric Testing Centers or Pearson Professional Centers located in Iowa (Bettendorf, Coralville, Davenport, Iowa City, and Sioux City)
- Arrive at your chosen testing location at least an hour before your scheduled examination time prepared to test.
- You will be notified of your test score immediately after completing the exam.
Step 4: Ongoing Annual Renewal Requirements in Iowa
Investment Advisor Firm:
- Renewals for IA firms and IARs in Iowa are processed completely electronically through the Investment Adviser Registration Depository
- License renewal actions must be completed by December 31st every year
- Iowa’s renewal fees are $100 for the IA firm and $30 for each IAR in the firm
- Renewal fees must also be paid for any other state(s) in which your firm is registered
- An additional $100 administrative fee is paid to the IARD upon renewal
- Annual updates to Form ADV are also required each year
Investment Adviser Representatives:
As an Investment adviser representative, you will be required to ensure that your employer’s compliance department (Super Account Administrator) maintains current information on your Form U-4. If you are a sole proprietor, you must make any required updates to Form U-4 yourself. Employees of a firm must submit changes through their firm’s compliance department in the event of changes to the following information:
- Customer complaints
- Disciplinary action
- Additional Certifications
- Residential address change
- Additional education completion
- Civil judgments
- Jurisdiction changes
- Name changes (marriage)
- Additional business activities
- Criminal record change