How to Register as an Investment Advisor in New Jersey

• FINRA Entitlement Paperwork: To initiate the process of becoming a registered investment advisor in New Jersey, 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 New Jersey 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, "[...] no registration as an investment adviser shall be granted to a person who has custody of clients' funds or securities unless the applicant has a minimum capital of $ 35,000 or has posted a surety bond in the amount of $ 35,000, except that investment advisers having custody solely due to: 1. A direct fee deduction [...] shall not be required to comply with the net worth or bonding requirements set forth in this section or 13:47A-2.3; or 2. Advising pooled investment vehicles [...] shall not be required to comply with the net worth or bonding requirements set forth in this section or N.J.A.C. 13:47A-2.3. (b) An investment adviser, as defined under 49:3-49(g), who has discretionary authority over client funds or securities, but does not have custody of client funds or securities shall maintain at all times a minimum net worth of $ 10,000. (c) An investment adviser registered, as defined under 49:3-49(g), who accepts prepayment of advisory fees of more than $ 500.00 per client and six or more months in advance shall maintain at all times a positive net worth." Source

• Surety Bonds: Permitted in lieu of Net Capital; only required if advisor has discretionary authority

• Fees: Submit a $375 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.