50-State Financial Services Licensing Compliance Guide
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Investment Advisor Business License

Learn how to obtain and maintain an investment advisor business license.

Starting or Expanding an Investment Advisor Business

Investment advisor firms specialize in guiding clients on buying and selling securities. This area of finance is heavily regulated by individual states as well as the US Securities and Exchange Commission (SEC). The more assets a company holds, the more likely it will be regulated under the SEC. If an investment advisor firm does not meet the SEC standard for registration, it must register with its home state and any other state in which it does business.

The process to register your business will depend on your state’s requirements. In general, you will go through the following steps:

  • Learn your state’s business registration and licensing requirements.
  • Decide on a business name and entity structure.
  • Apply for a federal tax identification number from the Internal Revenue Service and register with the Secretary of State.
  • Obtain necessary types of insurance, including general liability, commercial auto, and workers’ compensation.
  • Research license and registration renewal requirements and prepare to keep your business compliant.

In addition to the standard business registration process, investment advisor firms are also required to fill out a Form ADV. This 78-page application is processed through a secure internet-based data system known as the Investment Advisor Registration Depository (IARD). While state processing times vary, SEC registrations take 45 days.

In conjunction with Form ADV, some states require a passing score on a competency exam for each individual acting as an investment advisor. There may also be a fee for processing the application, as well as a bond or other disclosures about the firm.

If you are concerned about managing the business registration process on your own, you can seek guidance from the business licensing experts at Harbor Compliance. With our professional licensing services, we offer full support through all of the stages of the corporate life cycle and can provide access to expert software insights. We make preparing and filing applications easy and handle communication with government agencies on your behalf. With our software, you can track your registration status, license numbers, filing history, fees, and renewals 24/7.

Obtaining an Investment Advisor Business License

In order to sell investment products, financial advisors must obtain licensure. There are four types of licenses in the US, including Series 6, Series 7, Series 63, and Series 65 licenses.

  • Series 6 license - A Series 6 license is administered by the Financial Industry Regulatory Authority (FINRA) and allows advisors to sell packaged securities like mutual funds and variable annuities.
  • Series 7 license - Series 7 licenses are also administered by FINRA. They enable advisors to sell nearly every type of investment product, including stocks, bonds, options, and futures.
  • Series 63 license - Every state requires a Series 63 license for financial advisors to conduct business within its borders. The test to obtain a Series 63 license covers laws and regulations.
  • Series 65 license - Series 65 licenses are required for financial advisors who are compensated with fees instead of commission.

Remember that licensing requirements for investment advisor businesses vary by state. It is essential to verify the process in your state to ensure you are prepared every step of the way. You will likely need to gather all relevant documentation, including financial statements, proof of a commercial activity license, a business plan, and more.

You will also need to appoint a registered agent to receive notices of lawsuits and other legal or government notices. To manage those tasks more efficiently, Harbor Compliance offers licensing management software and managed services to help simplify the application process, allowing you to focus on other aspects of running your business.

Maintenance and Renewal

Most states and cities require licenses to be renewed on an annual or biennial basis. Renewal ensures your business complies with all state and local regulations. Renewal fees vary, so it is a good idea to be aware of what you may owe to keep your business in good standing.

If you are currently operating an investment advisor business and are looking to outsource your maintenance and renewal duties, Harbor Compliance can help. Harbor Compliance License Manager helps finance firms maintain their licenses by automating repetitive tasks like tracking renewals and compliance deadlines. Through License Manager, you can also access Compliance Core™ – our extensive, proprietary database of nationwide licensing requirements – to research the requirements for the states in which you work. Contact our licensing experts today to learn more.

Explore Licensing by State

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