Becoming a Financial Advisor in Michigan

Becoming a financial advisor in Michigan requires registering an independent investment adviser (IA) firm or registering as an investment adviser representative (IAR) of a firm already in practice in the state. The following is a step-by-step guide describing how to become an IAR or establish an IA firm in Michigan registered at either the state level with the Michigan Department of Licensing and Regulatory Affairs or at the federal level with the Securities & Exchange Commission (SEC).

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All investment advisers and representatives operating in Michigan must adhere to the Michigan Uniform Securities Act.

Step 1. Get Your Education

Pursue a degree. During your time as an investment adviser, your educational background will be stored in a national registry. This information is made available to all potential clients. More often than not, individuals who offer financial planning and advisory services have bachelor’s or master’s degrees. It has also become more common to see advisers holding highly specialized degrees.

There are numerous degrees that can assist you in becoming an investment adviser, some are:

• BA or BS -Accounting
• BA-Consumer and Family Financial Services
• MBA-Accounting and Finance or simply Finance
• MS-Accounting, Personal Financial Planning, or Finance
• PhD-Accounting or Finance

Enroll in the right courses. Some relevant courses are:

• Business communications
• Marketing
• Business Ethics
• Economics
• Behavior of persons, organizations, and groups
• Accounting
• Management
• Finance
• Business law
• Taxation
• Computer information systems
• Statistics
• Quantitative applications in business

Before choosing to become an adviser, consider looking in to a specialized professional certification. These certifications are entirely elective and aren’t required for either federal or state registration. Take note that specialty certifications require you to meet a minimum eligibility requirement in either industry experience or formal education.

• Chartered Investment Counselor (CIC)
• Chartered Financial Analyst (CFA)
• Chartered Financial Consultant (ChFC)
• Personal Financial Specialist (PFS)
• Certified Financial Planner (CFP)

Step 2: Register Your Firm in Michigan

(This step will only be applicable if you are interested in establishing your own IA firm in Michigan. If you will start your career by working with an established firm, you can skip to Step 3.)

Both federal and state level investment advisers operating in Michigan use the FINRA-managed Investment Adviser Registration Depository (IARD) system to register. If your IA will be working locally and managing less than $100 million in client assets, you’ll register through the Michigan Department of Licensing and Regulatory Affairs. If your firm will manage client assets that total more than $100 million, you’ll register at the federal level with the Securities and Exchange Commission (SEC). The following describes both.

1. Initiate the FINRA Entitlement Process. You will need to open an IARD User Account by completing the proper Entitlement Forms (Section 3). This process also allows your firm to designate a Super Accountant Administrator (SAA) who will be emailed a user id and login password allowing access to the Firm Gateway.
2. Fund the IARD User Account to cover the following:

• $200 initial Michigan IA firm filing fee
• Exam fees for each new IAR that will be in the firm
• $65 initial IAR filing fee for each representative of the firm
• $225 initial IARD filing fee for SEC-registered advisors (fees for state registrants currently being waived)
• Complete the Form ADV. This details your firm’s investment philosophy, the background on firm representatives, fee structure, and other relevant information that clients need. The IARD provides an electronic version of this form. To complete the registration process you will need to select Michigan as the state in which your firm will be doing business.
• Submit a form U-4 Uniform Application for Securities Registration or Transfer for each investment adviser representative (IAR) in your firm. Whether you choose to be a sole proprietor or plan to set up the firm as an LLC in Michigan, you will be considered a representative of the firm and will be required to submit a Form U-4 for yourself. More information regarding specific IAR requirements can be found in Step 3.
• The following documents must be sent as an attachment to an email to [email protected] or sent by postal mail to OFIR – Securities, P.O. Box 30701, Lansing, MI 48909-8201:

• Copies of contracts that will be used with clients
• A copy of the firm’s balance sheet
• A Supplemental Application Form

Step 3: Take the Required Exam(s)

The state of Michigan and the SEC will waive exam requirements if you have earned one of these professional designations:

• Chartered Financial Analyst (CFA)
• Chartered Financial Consultant (ChFC)
• Personal Financial Specialist (PFS)
• Certified Financial Planner (CFP)
• Chartered Investment Counselor (CIC)

1. Register for required exams. Michigan requires that IAR candidates complete at least one of the following:

• The Series 65, Uniform Investment Adviser Law Examination

OR

• The Series 7, General Securities Representative Examination, which requires sponsorship through a FINRA-member firm, in combination with the Series 66, Uniform Combined State Law Examination

Register:

• Form U-4 Uniform Application for Securities Industry Registration or Transfer. Form U-4 serves as both the registration application and the exam application.
• Schedule required exam(s) through one of the Prometric or Pearson Professional Center testing locations in Michigan. All exam(s) must be scheduled within 120 days of registration.
• Plan on arriving at the designated testing center at least one hour before your exam time on the examination day.
• You will receive an exam score immediately after completion of the exam.

Step 4: Ongoing Renewal and Update Requirements in Michigan

Investment Advisor Firm:

• IAR license and IA firm renewals will be completed through the Investment Adviser Registration Depository (IARD)
• Michigan’s renewal fees are $200 for the firm and $65 for each IAR in your firm
• License renewals for the both the firm and employed IARs must be completed by December 31st every year
• Additional IARD administrative fee associated with renewal is $100
• Renewal fees are paid for all states in which the firm and its representatives are registered
• Annual updates to the ADV will always be required

Investment Adviser Representatives:
IARs must maintain current information on their Form U-4. Sole proprietors are required to manage their own updates; however, employees of a firm should notify their compliance department of all incidents that affect the following:

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