North Carolina Investment Adviser Registration

In North Carolina, individuals and firms providing investment advice for compensation must typically register as Investment Advisers (IAs) with the North Carolina Secretary of State, Securities Division. This registration process is designed to protect investors by ensuring that those offering advice meet certain qualifications and adhere to ethical standards.

Who Needs to Register?

Generally, anyone who:

• Provides advice to others regarding the value of securities or the advisability of investing in, purchasing, or selling securities.
• Issues or promulgates analyses or reports concerning securities.
• Is in the business of providing investment advice.

…and receives compensation for these services must register as an IA in North Carolina. This includes financial planners, wealth managers, and portfolio managers.

Registration Process

The registration process primarily occurs through the Investment Adviser Registration Depository (IARD), a web-based system operated by the Financial Industry Regulatory Authority (FINRA). Here’s a general overview:

1. Determine Registration Category: Determine whether you need to register as a state-registered investment adviser or a federal covered adviser. Generally, firms managing less than $100 million in assets under management (AUM) are typically state-registered. Firms with AUM exceeding $100 million generally register with the SEC as federal covered advisers, but may still need to notice file in North Carolina if they have a place of business or six or more clients in the state.
2. Obtain a CRD Number: If you don’t already have one, obtain a Central Registration Depository (CRD) number through FINRA.
3. File Form ADV: Complete and file Form ADV (Part 1 and Part 2) electronically through the IARD system. Form ADV provides detailed information about the IA, including its business practices, ownership structure, advisory personnel, and any disciplinary history. Part 2 (the “brochure”) is generally given to clients.
4. Pay Fees: Pay the required registration fees to the North Carolina Securities Division through the IARD system.
5. Pass Examinations: Individuals providing investment advice may be required to pass qualifying examinations, such as the Series 65 Uniform Investment Adviser Law Examination or hold a qualifying professional designation like the CFP or CFA.
6. Provide Supporting Documentation: The Securities Division may request additional information and documentation to verify the information provided in Form ADV.
7. Review and Approval: The North Carolina Securities Division will review the application and supporting documentation. They may contact you with questions or requests for clarification.

Ongoing Compliance

Registration is not a one-time event. Registered IAs must maintain compliance with North Carolina securities laws and regulations, which includes:

• Annual Renewal: Renewing registration annually through the IARD system.
• Updating Form ADV: Updating Form ADV promptly to reflect any material changes to the IA’s business practices or operations.
• Maintaining Records: Maintaining accurate and complete records as required by law.
• Supervision: Implementing and maintaining a robust supervisory system to oversee the activities of advisory personnel.
• Compliance with Fiduciary Duty: Acting in the best interests of clients and providing suitable investment advice.

Disclaimer

This information is intended for general guidance only and does not constitute legal advice. Consult with a qualified attorney or compliance professional for specific advice regarding North Carolina investment adviser registration requirements.