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Investment Adviser Representatives

Investment Adviser Representatives

What is an Investment Adviser Representative?

Under Michigan law, an investment adviser representative is an “individual employed by or associated with an investment adviser or federal covered investment adviser and who makes any recommendations or otherwise gives investment advice regarding securities, manages accounts or portfolios of clients, determines which recommendation or advice regarding securities should be given, provides investment advice or holds himself or herself out as providing investment advice, receives compensation to solicit, offer, or negotiate for the sale of or for selling investment advice, or supervises employees who perform any of the foregoing. The term does not include an individual who meets any of the following: (i) Performs only clerical or ministerial acts. (ii) Is an agent whose performance of investment advice is solely incidental to the individual acting as an agent and does not receive special compensation for investment advisory services. (iii) Is employed by or associated with a federal covered investment adviser, unless the individual meets any of the following: (A) Has a "place of business" in this state as that term is defined in rule 203A-3 adopted under section 203A of the investment advisers act of 1940, 17 CFR 275.203A-3, and is an "investment adviser representative" as that term is defined in rule 203A-3 adopted under section 203A of the investment advisers act of 1940, 17 CFR 275.203A-3. (B) Has a "place of business" in this state as that term is defined in rule 203A-3 adopted under section 203A of the investment advisers act of 1940, 17 CFR 275.203A-3, and is not a "supervised person" as that term is defined in section 202(a)(25) of the investment advisers act of 1940, 15 USC 80b-2. (iv) Is excluded by rule or order under this act.

Statute Authority

Rule Authority

Forms/ Documents

  • Applications shall include:

    1. Form U4 filed electronically through FINRA’s Central Registration Depository (“CRD”)
    2. $65 filing fee paid through CRD
    3. Proof of passing the Series 65 exam or Series 7 and 66 exams within 2 years preceding the application date or at least one exception under Rule 451.4.12:
    • A qualifying professional designation that is current and in good standing of CFP, ChFC, PFS, CFA, and CIC
    • Within the 2 years preceding the application date, applicant was registered as an investment adviser or an investment adviser representative in any state that requires the licensing, registration, or qualification of investment advisers or investment adviser representatives.
    • An applicant who has taken and passed the Series 65 within 2 years immediately preceding the date the application is filed with the administrator, or at any time if the applicant has been registered or licensed as an investment adviser or investment adviser representative within the two years immediately preceding the date the application is filed with the administrator, shall not be required to take and pass the Series 65 again.  
    • An applicant who is an agent for a broker-dealer and an investment adviser and who is not required by the agent's home jurisdiction to make a separate filing on CRD as an investment adviser representative, but who has previously met the examination requirement described in rule 451.4.12(1) necessary to provide advisory services on behalf of the broker dealer or the investment adviser, shall not be required to re-take the Series 65.
    When the application has been received via CRD, applicants with disciplinary items on their application or with deficiencies may be required to submit additional information. Investment adviser representatives must keep their applications current by updating via CRD whenever the information in the application becomes outdated. Please do not mail or email a copy of the Form U-4 to the State of Michigan. The Form U-4 must be submitted through CRD and we will be notified.

     

  • Mass Transfer

    Firms may mass transfer IAR's from one firm to another. Michigan has a mass transfer fee of $65.00 per IAR. FINRA will notify Michigan when the transfer takes place, and the fees will be deducted automatically from the firm's account. 
     
    It is requested that firms intending a mass transfer provide the Bureau with a list of security agents and IARs that will be transferred at least 30 days prior. Also, personnel with Form U4/U5/U6 reportable disclosure items should be highlighted. The list should be emailed to CSCL-IAR-Agent@michigan.gov.

    Investment Adviser Representative Continuing Education Requirements (IAR CE) and FINRA’s Financial Professional Gateway (FinPro)

    NASAA’s IAR Continuing Education FAQs
     
    IARs will need to attain 12 continuing education credits each year to maintain their IAR registration in Michigan. A "credit" is a unit designated by NASAA to be at least 50 minutes of educational instruction. Some courses offer more than one credit depending on the length of the course. Generally, the provider's course description will identify the number of credits available for completing the course. The 12 credits must include six credits of Products and Practices and six credits of Ethics and Professional Responsibility. The mandatory CE program applies to all registered IARs of both state-registered and federal covered investment advisers. Courses are offered by NASAA approved course providers, which can be found on NASAA's website. An IAR cannot receive credit more than once for the same course and must take care to avoid duplicate courses in subsequent years. (An exception to this is a course that is updated and receives a new course number.) 
     
    If an IAR does not complete the continuing education requirement by the annual deadline, the IAR will pay the registration renewal fee and FINRA’s Central Registration Depository (“CRD”) will set their IAR continuing education status to "CE Inactive." The IAR can continue to do business, however, if continuing education is not completed by the end of the second year, the IAR will be unable to renew their registration, and it will be terminated for failing to complete the continuing education.
     
    FINRA’s Financial Professional Gateway (FinPro) provides individuals (current or former IARs) direct access to resources and tools to manage their securities registration information and a platform to monitor their continuing education requirements. FinPro is an important tool for IARs because it provides them with a mechanism to view courses taken and the progress towards completion of their annual continuing education requirement. Since IARs are responsible for ensuring their CE vendor reports completion of continuing education, they may find FinPro useful for tracking and monitoring continuing education. An instructional guide on how to set-up a FinPro account can be found on FINRA’s website.
     
    Our IAR CE Webinar provides an overview of IAR CE requirements. A transcript of the webinar is also available. 

    Amendments 

    Any amendments to the IAR's Form U-4 should be submitted electronically through CRD. An IAR is required to file any changes to their Form U-4 within 30 days of the event requiring amendment, per Rule 451.4.11. Please do not mail or email a copy of the Form U-4 to the State of Michigan. The Form U-4 must be submitted through CRD and we will be notified.

  • Investment adviser representative registrations expire concurrently with the investment adviser's registration on December 31st. 
     
    Renewal applications for investment advisers and investment adviser representatives are processed through the FINRA’s Central Registration Depository (“CRD”) and Investment Adviser Registration Depository (“IARD”). Preliminary Renewal Rosters containing the fees for all jurisdictions in which the firm is currently registered, or notice filed and payment instructions are made available through CRD/IARD in November of each year. The CRD/IARD sets a deadline date in December when firms must complete their renewal payments. Firms that fail to meet the deadline to deposit sufficient funds with the CRD/IARD will be listed as Failure to Renew and their registration is terminated at year end. When such firms are termed, all investment adviser representatives and branches associated with those advisers will also be termed. A new application and fee will be required.
     
    Renewal payments are processed through CRD/IARD. The renewal fee is $65.00 per IAR. The fee is deducted automatically from the firm's account based upon the renewal timetable set up each December by FINRA. All firms are notified by FINRA well in advance of the renewal fee deadlines and should have adequate monies in their account to cover all fees due. Failure to pay the renewal fee will result in an IAR's registration being automatically terminated through CRD/IARD. A new application and fee will be required.

  • A Form U-5 must be submitted electronically through FINRA’s Central Registration Depository (“CRD”) by the employing investment adviser firm.

  • NASAA’s Examination Validity Extension Program (EVEP) and FINRA’s Maintaining Qualifications Program (MQP)

    NASAA’s Exam Validity Extension Program (EVEP) allows eligible security agents and investment adviser representatives the opportunity to extend the validity of certain examinations for a period of up to five years. All eligible security agents and investment adviser representatives can enroll in the EVEP. Michigan has amended Rule 451.4.9 and adopted new Rule 451.4.30 implementing the EVEP program that is administered by NASAA and coordinated with FINRA’s Maintaining Qualifications Program (MQP).

    Examination Waivers

    An examination waiver is an extraordinary remedy because it requires the administrator to waive an explicit requirement of the Act and Rules. The qualifications examinations required are designed to objectively test an applicant’s understanding of important topics that are crucial to competent and ethical conduct in the securities industry. Test questions are updated regularly to reflect the evolving nature of the securities industry, and passage of an examination in the past is not by itself indicative of the likelihood of passage in the future. Waiver of these examination requirements requires extraordinary justification beyond having past experience in the securities industry or having previously passed a qualifications examination that is no longer valid. Requests for an examination waiver must be made in writing to the Bureau and be signed by the applicant. The waiver request must include significant justification, including an explanation of the applicant’s background. The explanation should clearly articulate how their background, education, and experience should act as a replacement for the criteria objectively tested on the relevant examination. Using the appropriate link below as a reference, it should include relevant details related to the test specifications for the specific examination, and why the applicant believes that their background should act as a replacement for the criteria tested on the relevant examination. Descriptions of the relevant test specifications are available below for your convenience.

    Series 63 Overview:

        Test Specifications for Series 63

    Series 65 Overview: 

        Test Specification for Series 65

    Series 66 Overview: 

        Test Specification for Series 66

    A Form U-4 must be filed prior to submitting a waiver request. Waiver requests should be emailed to CSCL-IAR-Agent@michigan.gov.

Contact Us:

Department of Licensing and Regulatory Affairs (LARA)
Corporations, Securities & Commercial Licensing Bureau (CSCL)
Securities and Audit Division
Phone: (517) 335-5237
Email: LARA-CSCL-Securities-Audit@michigan.gov