This guide will help you to become a financial adviser in Virginia by describing how to register an independent investment advisor (IA) firm of your own or how to become registered as an investment adviser representative (IAR) so as to work for an established firm. Both state level registration through the Commonwealth of Virginia State Corporate Commission, Division of Securities and Retail Franchising, and federal level registration through the Securities and Exchange Commission (SEC) are covered in this guide.
The Virginia Securities Act governs the business practices of all investment adviser firms, firm principals, and firm representatives operating in the state.
Step 1. Pursue a Degree
Obtaining a bachelor’s degree is a step in the right direction. Clients will access information on your educational credentials through the Investment Adviser Public Disclosure (IAPD) database.
Degrees that will serve you well as a financial advisor:
- BA or BS-Accounting
- BA-Consumer and Family Financial Services
- MS-Finance or Accounting
- MS-Personal Financial Planning
- MBA –Finance
- MBA-Accounting and Finance
- PhD-Finance or Accounting
The world of investment advising is requires a broad skill set. Consider enrolling in these courses in the pursuit of your degree:
- Statistics
- Ethics in business
- Business communications
- Taxation
- Finance
- Economics
- Behavior of organizations, persons, and groups
- Business law
- Management
- Computer information systems
- Quantitative applications applied to business
- Marketing
- Accounting
Earning a professional certification will assure that you’re fully capable of providing expert level service to your clients. Certifications are completely optional, but highly beneficial. Specific professional certifications that you might want to consider as an investment advisor are:
- Chartered Financial Analyst (CFA)
- Certified Financial Planner (CFP)
- Personal Financial Specialist (PFS)
- Chartered Investment Counselor (CIC)
- Chartered Financial Consultant (ChFC)
Step 2: Register Your IA Firm in Virginia
(This step is required for a new IA firm. If your career will begin with an esting firm, skip down to Step 3.)
If your firm will be managing less than $100 million in client assets it will be registered at the state level with the Commonwealth of Virginia State Corporate Commission, Division of Securities and Retail Franchising. If your firm will manage client assets in excess of $100 million, it will be registered at the federal level through the Securities and Exchange Commission. In both instances, the Investment Adviser Registration Depository is used to complete the process, as is described below.
- Complete Entitlement Forms. In so doing, designate a Super Accountant Administrator (SAA) who will be responsible for managing your IARD User Account and who will have full access to the Financial Industry Regulatory Authorities (FINRAs) Web-based systems. As a firm owner, you would designate yourself as such. The SAA will be emailed with permission to access The Firm Gateway. This will allow the remaining steps to be completed.
- Fund the IARD User account to cover the required fees. If you’re a registered advisor in Virginia, you should expect to pay the firms registration fees, as well as exam fees for all firm representatives:
- $30 state filing fee for each investment adviser representative in the firm
- Virginia’s initial $200 firm filing fee (applies to state and federally registered firms)
- The exam fees for each IAR in the firm
- Initial IARD administrative fees of $225 for SEC-registered firms (initial IARD administrative fees for state registered firms are currently being waived)
- Electronically submit disclosure of employee data, investment philosophy, and fee structure using Form ADV. As a matter of standard protocol, this will be made available to clients.
- Submit Form U-4 Uniform Application for Securities Registration or Transfer for each representative in the firm. This will function as both the representatives’ exam and registration application.
- Send the following by mail to State Corporation Commission, Division of Securities and Retail Franchising, P.O. Box 1197, Richmond, Virginia 23218, or by email to [email protected]:
- A copy of all client agreements, advertising materials, stationary with letter head, business cards that will be used
- Copies of your firm’s supervisory and procedures manual and disaster recovery plan
- A signed affidavit with a statement affirming your firm has not conducted any business prior to registration, or that the firm has fewer than six clients if registering after surpassing the threshold of the de minimus exemption
- Financial statements that include:
- A trial balance of all ledger accounts
- A statement of all client funds or securities held in a single account
- A consolidated statement of all client debit balances
- A statement showing the number of client accounts held
- A balance sheet, income statement, and statement of cash flows prepared in accordance with generally accepted accounting principles
- Form IA XRF cross-Reference Between ADV Part II, ADV Part 1A/1B, Schedule F, Contract and Brochure
Step 3: Take the Required Exams
Although state and federal investment adviser firm principal and representative registration requires passing specific exams, exceptions may be granted if you request a formal waiver showing you hold one of the following professional certifications:
- Certified Financial Planner (CFP)
- Personal Financial Specialist (PFS)
- Chartered Financial Consultant (ChFC)
- Chartered Investment Counselor (CIC)
- Chartered Financial Analyst (CFA)
- Investment advisor firm principals and representative candidates have the option of completing one of the following:
OR
- The Series 7, General Securities Representative Examination, and Series 66, Uniform Combined State Law Examination.
Submit this form:
- Form U-4 Uniform Application for Securities Industry Registration or Transfer will satisfy the requirements for both the exam application as well as investment adviser representative registration application.
- Schedule exam(s) to be taken at one of the Prometric or Pearson Professional Center testing locations in Virginia. You will only have 120 days from your initial registration (submittal of Form U-4) to enroll in the proper exams.
- Arrive at your chosen testing facility at least one hour prior to your scheduled exam time.
- Your exam results will be released immediately after you’ve completed the test.
Step 4: Ongoing Renewal and Update Requirements in Virginia
Investment Advisor Firm:
The IARD (Investment Adviser Registration Depository) will be used to complete yearly registration renewals for both your firm and the representatives you employ. You will required to update Form ADV at least once yearly to show changes in your fee structure and any changes specific to your representative staff. You are expected to complete renewals by the December 31st deadline each year. The following fees will be associated with renewal:
- Virginia’s renewal fees are $200 for the firm, and $30 for each investment adviser representative within the firm
- The additional IARD administrative renewal fee is $100
- All renewal fees will be paid for each state in which each firm representative is currently registered
Investment Adviser Representatives:
If operating your investment adviser firm independently, you will be expected to keep your form U-4 updated.
As an employed representative, you will alert the Super Account Administrator in your firm’s compliance department in the event that changes to or the occurrence of the following take place:
- Client complaints
- Civil judgments
- Educational background
- Criminal record
- Certifications
- Additional business activities
- Residential address
- Name change (marriage)
- Disciplinary action