The definition in Wis. Stat. s. 551.102(16) states in general that an investment adviser representative is anyone who is employed by or associated with an investment adviser or a federal covered adviser who makes recommendations or gives advice on securities, manages accounts of clients, holds themselves out as providing investment advice or is compensated for soliciting clients for an investment adviser. This does not include a clerical or ministerial employee, but does include solicitors.
There is an exemption from investment adviser representative registration if the representative is associated with an investment adviser that does not have a place of business in Wisconsin and has no more than five natural person clients during the preceding 12 months.
FOR FEDERAL ADVISERS ONLY: Investment adviser representatives of federal covered advisers who have no place of business in Wisconsin do not need to be registered, regardless of the number of clients.
A third party solicitor is a person who is neither a partner, officer, director or employee of the adviser nor is a supervised person of the adviser. An example is an independent contractor who solicits or refers potential clients to a number of different, unaffiliated investment advisers and receives a fee for those referrals. The advisers pay the third party solicitor a fee for each referral but exercise no supervision of the solicitor's activities. The solicitor has the option of arranging with each investment adviser to become registered as an investment adviser representative or becoming a separately registered investment adviser.
Generally, the staff considers any person providing advice on a specific client's portfolio, whether directly or indirectly, or who discusses the performance of the portfolio or the investment adviser's recommendations, to be acting in the role of an investment adviser representative. For example, a person who reviews a particular client's account, makes recommendations to another investment adviser but never actually speaks with the client, will still be required to be registered as an investment adviser representative. The advice was specific to that particular client's needs and portfolio and therefore, the adviser is providing advice to a Wisconsin client.
However, the staff has usually determined that a member of an investment committee which makes generic decisions on an investment adviser's recommendations, with no consideration given as to which clients hold or should hold such securities, is not transacting business or providing advice for Wisconsin clients and therefore would not need to be registered as an investment adviser representative.
The Financial Industry Regulatory Authority (FINRA) restructured its representative-level qualification examination program beginning October 1, 2018. Wisconsin Division of Securities issued this Order Requiring Compliance with New FINRA Examination Requirements.
Every individual seeking to become registered as an investment adviser or an investment adviser representative must pass the examinations prescribed in Wis. Admin. Code s. DFI-Sec 5.01(3) and the Order. These examinations are the post-January 1, 2000 versions of the North American Securities Administrators Association (NASAA) Series 65 Uniform Investment Adviser law Examination or the combination of the post-January 1, 2000 version of the NASAA Series 66 Uniform Combined State Law Examination in conjunction with the FINRA Securities Industry Essentials (SIE) and Series 7 General Securities Representative examinations.
The Series 65 is the full exam covering investment adviser regulation topics and also product and economic theory knowledge. The Series 66 exam can be utilized as an alternative to the Series 65 only in conjunction with the SIE and Series 7. The Series 66 covers investment adviser regulation topics and the SIE and Series 7 exams cover the product knowledge and economic issues. You do not need both a Series 65 and Series 66. The Series 66 must always be accompanied by the SIE and Series 7 exams.
Anyone who meets the criteria set forth in Wis. Admin. Code s. DFI-Sec 5.01(4)(d) can claim a waiver if the person holds any of the following designations and is in good standing with the sponsoring organization:
- CFP--Certified Financial Planner
- ChFC--Chartered Financial Consultant
- PFS--Personal Financial Specialist
- CFA--Chartered Financial Analyst
- CIC--Chartered Investment Counselor
All examinations are administered by FINRA at their computer testing sites and reservations to take the exams are made by filing Form U4
if the applicant is currently seeking registration with an investment adviser or federal covered adviser, or through Test Enrollment Services System (TESS)
for individuals not associated with a firm, along with the appropriate fee. The division does not have forms nor does it have any information or scheduling ability with regard to these examinations. All inquiries should be directed to FINRA at 301-590-6500. Study guides for the Series 65 and 66 exams are available on the NASAA website
There are a number of private
organizations that offer classroom or self-study courses for the exams. A
list of these vendors is available on the NASAA website. These vendors are not endorsed, recommended or rated by the division or NASAA.
Applications for registration as an investment adviser representative are accomplished by the investment adviser submitting Form U4
electronically to the division via the Investment Adviser Registration Depository (IARD) along with the $80 registration fee.
When the application has been received via the IARD, any applicant who does not have a disciplinary history will automatically be approved. Applicants with disciplinary items on their application will be manually reviewed by the division. More information regarding the reported disclosure may be requested prior to an approval. Investment adviser representatives must keep their applications current by updating via the IARD whenever the information in the application becomes outdated. Failure to maintain an accurate application may result in action against the investment adviser representative's registration.
Investment adviser representative registrations expire concurrently with the investment adviser's registration on December 31st. Renewal of investment adviser representative registrations is accomplished as part of the annual renewal sent to investment advisers by the IARD system in November. (See Renewals section).
Withdrawals for investment adviser representatives who terminate their employment for any reason must be filed by submitting Form U5 through IARD within 30 calendar days of termination. See Wis. Admin. Code s. DFI-Sec 5.08(2).
Phone: (608) 266-2139