Series 65: 8.7.3 Registration Of Investment Advisers

8.7.3  Registration of Investment Advisers

If a person or company meets the definition of an investment adviser for its state and does not qualify as a federal covered adviser, then state registration is required. The purpose of state registration is to allow the state securities administrator to track and examine investment advisers operating in its state, as well as to give consumers a way of accessing basic information about advisers and their practices. When registration is required, a failure to do so is a big deal and can result in substantial fines.

Of course, as with everything, there are exceptions to the rules about who must register, even though someone might otherwise meet their state’s definition of an investment adviser.

The two exceptions to the registration requirement for people and firms actually meeting the definition of an investment adviser are:

[The investment adviser] has no place of business in this state and (A) [the adviser’s] only clients in this state are investment