Becoming a financial adviser in South Carolina means establishing an investment adviser (IA) firm or working for an existing firm as an investment adviser representative (IAR). This informational guide will cover both IA and IAR registration at the state level with the South Carolina Securities Division as well as at the federal level with the Securities and Exchange Commission.
Investment advisers and firm representatives doing business in South Carolina are bound to the South Carolina Uniform Securities Act.
Step 1. Get Your Education
The degree you earn will be verifiable by prospective clients through the Investment Adviser Public Disclosure (IAPD) Many IA firm proprietors and representatives pursue a degree to develop their investment advising expertise.
Some degrees that might be worth considering are:
- BA-Accounting
- BA-Consumer and Family Financial Services
- BS-Accounting
- MBA –Finance or MBA-Accounting and Finance
- MS-Finance
- MS-Personal Financial Planning
- MS-Accounting
- PhD-Finance
- PhD-Accounting
Expect your degree program to include some or all the following courses. Upon completion of these courses, you are one step closer to becoming an expert in the investment advising field:
- Taxation
- Quantitative applications applied to business
- Economics
- Business communications
- Computer information systems
- Ethics in business
- Finance
- Accounting
- Statistics
- Management
- Behavior of groups, persons, and organizations
- Business law
- Marketing
Professional certifications are well respected in the investment advising industry. These designation require at least a four year degree or sufficient on the job training and existing industry experience. Earning one of these designations allows investment adviser exam requirements to be waived by the South Carolina Securities Division:
- Certified Financial Planner (CFP)
- Chartered Financial Consultant (ChFC)
- Chartered Financial Analyst (CFA)
- Personal Financial Specialist (PFS)
- Chartered Investment Counselor (CIC)
Step 2: Register Your Firm in South Carolina
(This step will be needed if you are establishing your own IA firm. If you plan to pursue a career with an established firm, move on to Step 3.)
The FINRA-managed Investment Adviser Registration Depository (IARD) houses all of the necessary electronic forms you will need to register your firm and the representatives in your employ. State level registration through the South Carolina Securities Division is required for all firms managing less than $100 million in client assets. Managing assets totaling more than $100 million will require federal level registration through the Securities and Exchange Commission. The following describes the steps for both.
- Establish a User Account in the IARD. This will involve completing and submitting Entitlement Forms and assigning yourself or another individual of your choosing the role of Super Accountant Administrator (SAA). The SSA will receive a confirmation email with all login information for the Firm Gateway. Access to the gateway allows the following steps to be completed.
- IARD User Accounts will also be utilized to fund all state filing fees, registration fees, IAR registration and testing fees. Fund the account to cover the following:
- Exam fees for each IAR that will be in the firm
- South Carolina’s $210 initial state-covered firm filing fee
- South Carolina’s $55 initial state filing fee for IAR in your firm’s employ
- An initial $225 filing fee (for SEC-registered advisers only)
- Complete and submit Form ADV electronically. The ADV provides information on your firm’s fee structure, investment philosophy, and relevant background data on IARs employed by your firm. The information contained within the ADV is to be made available to prospective clients.
- Complete and Submit Form U-4 Uniform Application for Securities Registration or Transfer. In South Carolina, owners of registered firms and sole proprietors are considered representatives of their own firms and must complete the form as well.
- Send the following by mail to Office of the Attorney General, Securities Section, PO Box 11549, Columbia, SC 29211-1549:
- Copies of client contracts and agreements that you will use
- Surety Bond
- Verified firm financial statements
- Results of South Carolina Criminal record check (requires request form to be sent first along with a $25 fee paid by business check or money order to address on form)
- A listing of all investment adviser representatives you will employ along with their CRD numbers and office locations
Step 3: Take the Required Exam(s)
The Securities and Exchange Commission and the South Carolina Securities Division waive exam requirements for the following designees:
- Certified Financial Planner (CFP)
- Personal Financial Specialist (PFS)
- Chartered Financial Analyst (CFA)
- Chartered Financial Consultant (ChFC)
- Chartered Investment Counselor (CIC)
- Prior to state or federal registration, you will be required to attempt and pass one of the following:
OR
- The Series 7, General Securities Representative Examination (requires that a FINRA-member firm sponsor the IAR candidate) in combination with the Series 66, Uniform Combined State Law Examination
Register for the exam(s):
- The Form U-4 Uniform Application for Securities Industry Registration or Transfer has two primary purposes: IAR exam application and federal or state registration application.
- Scheduled exam(s) will be taken at one of the designated Prometric or Pearson Professional Center testing locations in South Carolina. All exams must be scheduled within 120 days of your initial registration.
- You should plan to arrive at the testing center prior to your scheduled exam on the designated day.
- Exam scores will be provided to all participants immediately following the exam completion.
Step 4: Ongoing Renewal and Update Requirements in South Carolina
Investment Advisor Firm:
- The Investment Adviser Registration Depository (IARD) will be used to complete IAR license and IA firm renewals for South Carolina state registrants and federally registered IAs
- The Investment Adviser Registration Depository (IARD) administrative fees charged for renewals are $100
- Renewal fees must be paid for each state each IAR in the firm’s employ is currently registered
- Updates to the Form ADV will be required each year to show any changes to fee structure or billing practices as well as any disciplinary action taken against the firm’s IARs
- License renewals should be completed by the December 31st deadline each year
- South Carolina’s renewal fees are $210 for the firm and $55 for each IAR employed by the firm
Investment Adviser Representatives:
Sole proprietors will need to maintain their own Form U-4. Employees of a new firm will provide their firm’s compliance department with all of the necessary documents needed to update the U-4. The firm’s Super Account Administrator (SAA) will have a 30 day window in which to make these updates. Changes will need to occur if any of the information listed below has changed:
- Name change (marriage)
- Education
- Certifications
- Client complaints
- Additional business activities
- Criminal record
- Civil judgments
- Residential address
- Disciplinary action