How to Register as an Investment Advisor in Hawaii

• FINRA Entitlement Paperwork: To initiate the process of becoming a registered investment advisor in Hawaii, 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 Hawaii 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, "(a) An investment adviser registered or required to be registered, who does not have custody of client funds or securities, and who does not have discretionary authority over client funds or securities, shall maintain a minimum net worth of $5,000 at all times. (b) An investment adviser registered or required to be registered, who has custody of client funds or securities shall maintain a minimum net worth of $35,000 at all times except: (1) Investment advisers that have custody solely due to their authority to deduct fees from client accounts and comply with the terms described in section 16-39-436 and related books and records shall only be required to maintain a minimum net worth of $5,000 at all times; or (2) Investment advisers to pooled investment vehicles that have custody solely due to the capacity in which they act in advising pooled investment vehicles and comply with the terms described in section 16-39-436 and related books and records shall only be required to maintain a minimum net worth of $5,000 at all times. (c) An investment adviser, registered or required to be registered, who has discretionary authority over client funds or securities, but does not have custody of client funds or securities, shall maintain a minimum net worth of $10,000 at all times. 6. BOND Ð If the applicant has custody of or discretionary authority over client funds or securities, a bond in the amount of $50,000 must be obtained. The bond must be issued by a surety company qualified to do business in Hawaii, with the State of Hawaii named as obligee. The Investment Adviser Bond Form is available online." Source, Source 2

• Surety Bonds: Required if advisor has custody

• Fees: Submit a $100 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.