This guide will provide step by step instruction on registering an independent investment advisor (IA) firm, or registering as an investment adviser representative (IAR) in Rhode Island. State level registrants are registered with the Rhode Island Department of Business Regulation, while federal level registrants register with the Securities and Exchange Commission. This guide covers both.
Investment adviser firms and firm representatives in Rhode Island operate in accordance with the Rhode Island Uniform Securities Act.
Step 1. Get Your Education
Get the right degree. Understanding financial markets and investment vehicles requires a relevant education. Your degree will be disclosed to clients and regulators through the Investment Adviser Public Disclosure (IAPD) database.
Your education will be a deciding factor for clients as they look for a trusted financial advisor. Some appropriate degree options include:
- BA-Accounting
- BA-Consumer and Family Financial Services
- BS-Accounting
- MBA-Accounting and Finance
- MBA –Finance
- MS-Accounting
- MS-Personal Financial Planning
- MS-Finance
- PhD-Accounting
- PhD-Finance
The following list of courses was put together to assist IA firm proprietors and IARs better develop expertise in their field:
- Economics
- Behavior of groups, persons, and organizations
- Business law
- Ethics in business
- Finance
- Accounting
- Taxation
- Statistics
- Management
- Marketing
- Business communications
- Computer information systems
- Quantitative applications applied to business
Professional certifications contribute to a strong sense of professional respect for the investment advisers that hold them, as they require a bachelor’s degree, or equivalent industry experience. Exam requirements are waived by the Rhode Island Department of Business Regulation for investment adviser applicants that hold the following:
- Chartered Financial Consultant (ChFC)
- Personal Financial Specialist (PFS)
- Chartered Financial Analyst (CFA)
- Chartered Investment Counselor (CIC)
- Certified Financial Planner (CFP)
Step 2: Register Your Firm in Rhode Island
(This step is only applicable if you will be establishing your own IA firm. If you plan to pursue a career with an established firm, move on to Step 3.)
Investment advisers are only required to register at the state level if they are managing less than $100 million in client assets. Firms managing in excess of this amount will be federally registered through the Securities and Exchange Commission (SEC). In both cases, the FINRA-administered Investment Adviser Registration Depository (IARD) is used to complete the registration process.
- Create a User Account in the IARD by completing Entitlement Forms (Section 3), assigning yourself or a selected designee the role of Super Accountant Administrator (SAA). The SSA will be assigned and emailed a login and password allowing access to the Firm Gateway. At this point, the SAA can complete all remaining steps.
- Your firm’s IARD User Account will be used to fund all of the state filing fees, as well as IAR registration and exam fees:
- Rhode Island charges a $300 initial state-covered firm filing fee; federal-covered advisors will pay $250 to Rhode Island
- An initial $225 IARD administrative fee for SEC-registered advisors who manage more than $100 million in client assets
- $60 initial Rhode Island filing fee for each IAR within the firm
- Initial IARD set up fees for state registered investment advisors are currently being waived
- Exam fees for each IAR that will be in the firm
- Complete and submit Form ADV electronically through the IARD. Pertinent information about your new firm is outlined here that will be made available to prospective clients.
- Complete and submit Form U-4 Uniform Application for Securities Registration or Transfer for each IAR employed by your firm. As a firm owner you will submit this form for yourself as well.
- Complete an Investment Adviser Questionnaire and Affidavit and mail the completed form to: Rhode Island Securities Regulation Division, 1511 Pontiac Avenue, Cranston RI 02920.
Step 3: Take the Required Exam(s)
Exam requirements are waived for representatives of both state and federal registered investment advisers for individual that hold one of the following professional designations:
- Personal Financial Specialist (PFS)
- Chartered Financial Consultant (ChFC)
- Chartered Investment Counselor (CIC)
- Chartered Financial Analyst (CFA)
- Certified Financial Planner (CFP)
- Investment adviser representatives and IA firm proprietors in the state of Rhode Island are required to complete one of the exam scenarios listed below:
OR
- The Series 7, General Securities Representative Examination, along with the Series 66, Uniform Combined State Law Examination
Apply for exams:
- The Form U-4 Uniform Application for Securities Industry Registration or Transfer serves two purposes: it is used as the exam application as well as the registration application with the Rhode Island Department of Business Regulation.
- Schedule to take the exam. It is your responsibility as an aspiring IAR to schedule all necessary exams through one of the Prometric or Pearson Professional Center testing locations in Rhode Island. This process must be completed within 120 days of submitting Form U-4.
- Arrive at the testing center prior to your scheduled exam on the designated day.
- All examinees will receive their exam scores immediately after the exam is complete.
Step 4: Ongoing Renewal and Update Requirements in Rhode Island
Investment Advisor Firm:
- Renewal fees will be paid for each state the firm’s investment adviser representatives are registered in
- License renewals should be completed by the December 31st deadline each year
- Updates that keep the ADV information current will be required each year (fee structure, representative information, etc)
- Rhode Island’s renewal fees are $300 for the firm ($250 for SEC-regulated firms) and $60 for each IAR in the firm’s employ
- License and IA firm renewals in Rhode Island
- Annual IARD administrative fees are $100
Investment Adviser Representatives:
IA Firm principals and IARs alike should be prepared to maintain the accuracy of their Form U-4. Employed representatives have the responsibility of providing their firm’s Super Account Administrator (SAA) with any new information that would warrant an update. Changes to the following would warrant an update to Form U-4:
- Education
- Additional business activities
- Criminal record
- Certifications
- Civil judgments
- Client complaints
- Residential address
- Disciplinary action
- Name change (marriage or other)