In the 1990s the National Securities Markets Improvement Act went into effect and turned over much of this regulatory authority to the states. Individual states now have primary regulatory responsibility for investment adviser firms with less than $25 million in assets under management. This includes most investment advisors and financial planners.
State regulatory agencies typically review applicant records history and financial stability prior to allowing investment advisors to conduct business. They also generally require investment advisors to pass an examination, undergo background checks, renew their registration annually, and report changes in their businesses or addresses promptly.
The point-of-contact sale for most investors is the investment adviser representative
or salesperson. Although the SEC does not require licensing of these people,
many states do. Some states also conduct unannounced, on-site examinations of
small investment advisors.
Click here to close this window and go back