Investment advisers operating in Texas can be subject to registration and ongoing regulatory requirements administered by the Texas State Securities Board.
Understanding these requirements is important for financial professionals starting an advisory firm, establishing a Texas office or providing investment advice to Texas residents.
Registering an Investment Adviser in Texas
Texas investment adviser applicants generally begin the registration process through the Investment Adviser Registration Depository (IARD).
Applicants file Form ADV Parts 1 and 2. Investment Adviser Representatives are generally registered through Form U4 using the CRD system.
Texas also requires an investment adviser organised as a sole proprietorship, corporation, LLC or partnership to have an individual registered as the firm’s designated officer.
Additional application materials can include organisational documents, a balance sheet, the firm’s standard advisory contract and its fee schedule.
Examination Requirements
Individuals applying as investment advisers or Investment Adviser Representatives are generally subject to examination requirements.
Texas accepts the Series 65 or specified combinations of other securities examinations, subject to the state’s rules and applicable waivers.
Registration requirements can therefore apply at both firm and individual level.
Maintaining Good Client Records
An advisory firm’s responsibilities continue after registration.
Client agreements, disclosures, financial information and records supporting the advice provided should form part of an organised compliance process.
Asset-Map helps financial professionals bring important household financial information together in a visual format. This can help advisers maintain an organised client record and make financial conversations easier to document and revisit.
Technology does not replace an adviser’s legal or compliance obligations, but an organised financial planning process can make maintaining consistent client records considerably easier.
This information is general information and should not be considered legal or compliance advice.