How to Register as an Investment Advisor in Alabama

• FINRA Entitlement Paperwork: To initiate the process of becoming a registered investment advisor in Alabama, individuals must first apply to the Financial Industry Regulatory Authority (FINRA) to create an account (Entitlement) for their WebCRD/IARD online system (the web application for the registration of RIA and its representatives). FINRA does not regulate or supervise RIAs, but the State of Alabama uses FINRA’s WebCRD/IARD system to process applications.

• Form ADV Part 1: Electronically file Form ADV through IARD. Form ADV Part 1 discloses information about the RIA, including its ownership structure, client base, operational practices, any disciplinary incidents involving the advisor or their employees, and affiliations. This form acts as the online portal for submitting additional documentation within the system.

• Form ADV Part 2A: Detail your RIA’s fee structure, services, disciplinary disclosures, and other firm information in Form ADV Part 2A. Form ADV Part 2A is also known as the Firm’s Disclosure Brochure.

• Form ADV Part 2B: Form ADV Part 2B provides information about the advisor, such as their education, employment history, potential conflicts of interest, and any disciplinary actions.

• Minimum Net Capital for most advisers: According to State Code, "4. Balance sheet prepared in accordance with GAAP, dated not more than 90 days prior to filing of application. All investment advisers must maintain a minimum net capital of $10,000.00 or post a $50,000.00 surety bond. 7. A surety bond in the amount of $50,000.00 on Form U-SB, payable to the State of Alabama if: The investment adviser maintains custody of client funds or securities; or The investment adviser has discretionary authority over customer accounts; or The investments adviser does not maintain the minimum net capital of $10,000.00." Source

• Surety Bonds: Permitted in lieu of Net Capital

• Fees: Submit a $250 fee for the firm's registration through FINRA IARD.

Disclaimer: This website offers general information and is not tailored to address individual business transactions or legal matters. It does not constitute legal advice and should not be relied upon as a substitute for professional legal guidance. While we strive to provide accurate and up-to-date information, we cannot guarantee its absolute accuracy or currency. Errors may occur, and laws may change over time. If you have any questions, please contact a Success Strategist.