Becoming a Financial Advisor in Vermont requires registering as an investment adviser or investment adviser representative, either at the state level through the Vermont Securities Division or at the federal level through the Securities and Exchange Commission (SEC). The following offers step-by-step instructions for both state and federally registered investment advisers and investment adviser representatives.
Both sate and federal level registrants must operate in accordance with the Vermont Securities Act.
Step 1. Pursue a Degree
- Choose a degree relevant to a career in finance. Clients will have the ability to review your educational background through the Investment Adviser Public Disclosure (IAPD) registry.
Some degrees that will set you up for success are:
- BA-Consumer and Family Financial Services
- MS-Personal Financial Planning
- MBA –Finance or MBA-Accounting and Finance
- Ethics in business
- Behavior of groups, persons, and organizations
- Computer information systems
- Quantitative applications applied to business
- Business communications
- Business law
- Chartered Investment Counselor (CIC)
- Certified Financial Planner (CFP)
- Chartered Financial Consultant (ChFC)
- Personal Financial Specialist (PFS)
- Chartered Financial Analyst (CFA)
Step 2: Register Your IA Firm in Vermont
(This step is required for individuals establishing themselves as independent investment advisers. If your career will begin with an existing investment adviser firm, skip down to Step 3.)
If you will be managing assets that exceed $100 million, you will register at the federal level with the Securities and Exchange Commission. If your assets under management will be less than this, registration is done through the Vermont Securities Division. In both cases the Investment Adviser Registration Depository is used to process registration.
- The registration process begins when you fill out firm specific Entitlement Forms (Section 3). You will assign yourself as Super Accountant Administrator (SAA). Once entitlement forms are approved, a confirmation email will be sent, along with login details for the Financial Industry Regulatory Authority (FINRA) firm Gateway. Gateway access will allow you to complete the remaining steps.
- Fund the IARD User Account to cover state and federal fees, all of which are paid through the IARD.
- Vermont charges an initial fee of $250 for state-registered advisors
- The SEC charges an initial $225 filing fee for federally-registered advisers
- Vermont charges an initial fee of $55 for each investment adviser representative (IAR) that will be in your employ
- Completed Vermont Investment Adviser Tax Certification Form
- Completed Affidavit of Investment Advisory Activity Form
- A document certifying the designated firm supervisor and certification that you have established written supervisory procedures
- A current balance sheet, audited if you hold custody of client funds and certified if you exercise discretionary authority
- A surety bond of $10,000 if taking custody of client assets or if holding discretionary authority. This is waived for sole proprietors able to prove a personal net worth of at least $35,000.
Step 3: Take the Required Exams
- Investment advisers must take and pass either:
- The Series 7, General Securities Representative Examination, and the Series 66, Uniform Combined State Law Examination.
Use one of the following forms to apply for the appropriate exams:
- Form U-4 Uniform Application for Securities Industry Registration or Transfer, which acts as both the exam, and federal or state registration application. This form is to be used for those interested in establishing themselves as independent investment advisers.
- The Form U-10, Uniform Examination request for non-FINRA Members. This is the exam-only application for non-sponsored exams. Completion of this form will not conclude the investment advisor registration process.
Step 4: Ongoing Renewal and Update Requirements in Vermont
Investment Advisor Firm:
- The IARD is used for all renewal actions
- All renewal fees will be paid for each state firm representatives are registered in
- Vermont’s renewal fees are $250 for state-covered firms and $55 for each investment adviser representative within the firm
- License renewals should be completed by the December 31st deadline each year
- Additional IARD administrative fees are $100
- Updates to the ADV will be required each year
Investment Adviser Representatives:
The firm’s Super Account Administrator (SSA) keeps form U-4s current for all firm representatives.
If a person has chosen to operate as a sole proprietor, they are responsible for updating the U-4 when any changes need to be made.
Firm SSAs will only have 30 days upon receipt of an update request from investment adviser representatives to make changes to employee files. Amendments that require an update to the Form U-4 are:
- Civil judgments
- Residential address
- Name change (marriage)
- Educational background
- Criminal record
- Disciplinary action
- Additional business activities
- Client complaints