8.7.5. The Investment Adviser Registration Process
To register at the state level as an investment adviser, firms must file the appropriate paperwork with the state through the national Investment Adviser Registration Depository system, or IARD. To register, an investment adviser must use this system to submit a number of forms, including Form ADV, which requires summary information about the firm, and Form U4, which requires information about the firm’s employees. Investment adviser applicants must give permission for the administrator to perform an appropriate background check and sign a “consent to service of process,” which allows an administrator to receive legal papers (summons, notice of lawsuits, etc.) on behalf of the adviser. Once the consent to service of process is filed, it does not need to be renewed.
Part 1 of Form ADV (which is short for “adviser”) includes general information about the investment adviser, such as:
• Information about the ownership and nature of their practice, including the names of the principals involved
• Location of the main office
• Types of services offered
• Whether the adviser has custody of customer assets
• Location of books and records
• Any relevant regulatory/disciplinary history
Part 2A of Form ADV includes information relevant to the firm’s clients, such as:
• Fees or fee structure for the services provided
• Types of advisory services offered
• Methods of analyzing investments (e.g., technical versus fundamental)
• Any disciplinary actions information
• Any conflicts of interest
• Educational and business background of management and key advisory personnel.
Part 2B of Form ADV provides specific information about the educational background, employment qualifications, disciplinary history, other business activities, and additional sources of compensation for any registered person who will be working with a client
Pa