• An Investment Advisory Representative (IAR) is an individual who provides personalized investment advice and portfolio management on behalf of a registered investment adviser (RIA).
– IARs must meet licensing and registration requirements (exams such as the Series 65 or Series 66 + Series 7, Form U4 filing, and registration via IARD/state regulators) and are generally held to a fiduciary standard.
– The RIA is the firm; the IAR is the person who represents that firm to clients. Firms register with the SEC or state securities regulators depending on assets under management and other rules.
– Becoming an IAR requires education, passing qualifying exams, registration paperwork, and ongoing compliance and continuing education.
What is an IAR?
An Investment Advisory Representative (IAR) is the licensed individual who:
– Provides investment advice about securities;
– Manages client accounts and portfolios;
– Makes or recommends investment decisions for clients; and/or
– Receives compensation for advisory activities or supervises those who do.
IARs are the primary client-facing advisers who execute an RIA firm’s advisory services. They can work with individuals, families, or institutions and may deliver comprehensive financial planning, asset allocation, and ongoing portfolio management.
RIA vs. IAR — the distinction
– Registered Investment Adviser (RIA): the legal entity (firm) registered with the SEC or state securities regulators to provide advisory services.
– Investment Advisory Representative (IAR): the natural person employed by or associated with the RIA who provides advice and interacts with clients.
Only in the narrow case of a single-person advisory business will the RIA and IAR effectively be the same single person. Otherwise treat the RIA as the firm and the IAR as the individual representative.
Regulatory and ethical framework
– IARs act on behalf of RIAs and are generally subject to a fiduciary duty: they must act in the best interest of their clients, disclose conflicts of interest, and follow fidelity/ care/ loyalty obligations.
– Firms and IARs are overseen by state securities regulators or the SEC (depending on firm registration), and many of the registration processes and filings occur through industry systems such as the Investment Adviser Registration Depository (IARD) and the Central Registration Depository (CRD).
– Compliance requirements include recordkeeping, written supervisory procedures, trade and account monitoring, advertising rules, Form ADV disclosures, and continuing education requirements that vary by jurisdiction.
Common responsibilities of an IAR
– Conducting client discovery and suitability/fact-finding (goals, time horizon, risk tolerance);
– Developing and recommending investment strategies and asset allocations;
– Selecting securities or investment products and implementing trades or model portfolios;
– Monitoring portfolio performance and rebalancing as needed;
– Preparing financial plans, reports, and periodic reviews for clients;
– Documenting recommendations, maintaining records, and making required disclosures;
– Supervising junior advisers or staff when applicable.
Typical qualifications and credentials
– Education: bachelor’s degree in finance, economics, accounting, or related fields is common (not always required).
– Licensing exams: most states require the Series 65 (Uniform Investment Adviser Law Exam) OR the combination of the Series 7 (General Securities Representative) + Series 66 (Uniform Combined State Law Exam). Some states may additionally require Series 63 (state securities law exam) for certain activities.
– Professional designations (optional but valuable): Certified Financial Planner (CFP®), Chartered Financial Analyst (CFA®) — these are not required to be an IAR but enhance credibility and expertise.
– Background checks and Form U4 filing: prospective IARs must complete a Form U4 (Uniform Application for Securities Industry Registration) and disclose employment and disciplinary history; fingerprinting/background checks may be required.
– Continuing education: many jurisdictions and professional designations require ongoing education.
How to become an IAR — practical step-by-step
Below is a practical, ordered checklist you can follow if you want to become an IAR.
1) Decide where you want to work and what role you want
– Work for an RIA firm, start your own RIA, or be dually registered (broker-dealer + RIA). Your path affects which exams and registrations you need.
2) Get the basic education and experience
– Earn a bachelor’s degree in a relevant field if possible and seek internships/positions in wealth management, financial planning, or investment research to gain practical experience.
3) Choose and prepare for the qualifying exam(s)
– Series 65: most direct route to be licensed solely as an IAR. It covers investment vehicles, economics, ethics, and fiduciary responsibilities. Administered by FINRA on behalf of regulators.
– Series 66 + Series 7: an alternative if you are, or will be, also registered as a representative of a broker-dealer. Series 66, combined with a Series 7 license, satisfies many states’ investment adviser representative requirements.
– Study tips: use approved prep providers, take multiple practice exams, focus on the fiduciary/ethics sections, and allow several weeks/months of study depending on experience level.
4) Register with the appropriate entities
– If joining an RIA firm: the firm will often sponsor or submit your Form U4 and register you in the jurisdiction(s) where you’ll do business.
– If opening your own RIA: create an IARD account and file Form ADV for the firm. Then submit Form U4 for yourself to the relevant regulators.
– Determine whether your advisory firm must register with the SEC or state regulators (this depends on assets under management and other factors; check current thresholds and rules).
5) Complete compliance prerequisites
– Provide fingerprints/background information if required.
– Read and understand the firm’s policies and procedures, privacy notices, and disclosure forms.
– Ensure Form ADV and other disclosures accurately describe services, fees, conflicts, and disciplinary history.
6) Start serving clients under supervision (where applicable)
– Work under an experienced supervisor or mentor if you’re newly registered.
– Keep thorough written notes of client meetings, recommendations, and suitability determinations.
– Follow the firm’s trade authorization, documentation, and review processes.
7) Maintain credentials and continue professional development
– Fulfill required continuing education for licenses and for designations like CFP/CFA if you hold them.
– Stay current on regulatory changes, SEC/state guidance, and best practices for fiduciary conduct.
Practical tips to accelerate and succeed as an IAR
– Gain a mentor and practical workplace supervision early — on-the-job experience is crucial for learning client communication and portfolio implementation.
– Consider pursuing a CFP® for comprehensive planning skills or the CFA® for deeper investment analysis — both can help attract clients and employers.
– Use checklists and standardized templates for client onboarding, suitability, disclosures, and trade authorization to reduce compliance risk.
– Maintain clean recordkeeping: document recommendations, client approvals, performance reports, and conflicts disclosures.
– If you plan to charge fees, clearly document fee schedule, billing method (asset-based, hourly, retainer), and obtain client consent in writing.
Benefits of becoming an IAR
– Professional credibility and legal authority to give investment advice and manage client assets.
– Ability to provide fee-based advisory services that may offer stable recurring revenue (fee-only or fee-based models).
– Career pathways into wealth management, portfolio management, financial planning, or founding your own advisory firm.
– Opportunity to specialize (retirement planning, institutional portfolios, tax-aware investing, etc.) and pursue advanced credentials.
Limitations and risks
– Licensing and registration do not eliminate regulatory compliance obligations; violations can lead to fines, suspensions, or bans.
– Fiduciary obligations mean you must prioritize client interests and manage conflicts carefully.
– Market risk and performance expectations: clients hold advisers accountable for outcomes even when markets are volatile.
– Ongoing time and cost investment: exams, continuing education, and compliance can be time-consuming and costly.
The bottom line
IARs are the licensed advisers who represent RIAs and deliver investment advice, portfolio management, and often comprehensive financial planning. Becoming an IAR requires passing required exams, completing registration filings (Form U4, Form ADV through IARD), and meeting state or SEC regulatory requirements. With appropriate training, a commitment to fiduciary conduct, and strong compliance discipline, the IAR role offers a clear professional path in financial advice and asset management.
Sources and further reading
– U.S. Securities and Exchange Commission, “General Information on the Regulation of Investment Advisers.”
– U.S. Securities and Exchange Commission, “Information for Newly Registered Investment Advisers.”
– U.S. Securities and Exchange Commission, “Standards of Conduct for Broker-Dealers and Investment Advisers: Care Obligations.”
– Investment Adviser Registration Depository (IARD), “Welcome to the Investment Adviser Registration Depository.”
– Financial Industry Regulatory Authority (FINRA), “Form U4 Instructions.”
– Financial Industry Regulatory Authority (FINRA), “Series 65 – Uniform Investment Adviser Law Exam.”
– Kaplan Financial, “RIA vs IAR: What Is The Difference.”
– North American Securities Administrators Association (NASAA), “Investment Adviser: FAQs.”
– Investopedia, “Investment Advisory Representative (IAR).”
Editor’s note: The following topics are reserved for upcoming updates and will be expanded with detailed examples and datasets.