Investment Advisory Representative (IAR)
Reviewed by Aug 27, 2020| Updated on
An investment advisory representative or IAR is one who gets a license to provide investment advice. Such a person can also work for corporates providing investment advisory services. The main service of an IAR is investment advice or financial planning. The individual typically receives a fee or commission for the services.
Understanding Investment Advisory Representative
1) Investment advisory representatives carry out financial planning and advisory services. They may have their own clients whom they assist in setting financial goals. They carry out profiling of the client based on their age, annual income and risk appetite. The financial assistance includes building an investment portfolio, planning for risky and risk-free investments. - In addition to financial goal setting, choosing of investments and building a portfolio, investment advisory representatives assist their clients in achieving their goals. There is a similar role while working as representatives of any of the firms registered as investment advisory firms. - Investment advisors or planners get paid by way of a fee which may be a lump sum or an hourly charge of fee. They may be paid a commission which is a percentage of the assets managed by them. Investment advisors should get themselves registered either as Certified Financial Planners or under the certification program of Chartered Financial Analyst. - The individuals or firms must obtain a registration with the Investment Adviser Registration Depository in the United States of America. The whole process is under FINRA under the law of the respective states in the USA. The advisor or the firm gets a registration number known as a CRD number and other registration information.
The investment advisors or advisory firms should work as per the applicable legal rules and regulations. The advice should be as per the qualification of the advisor, be it a CFA or CFP. The advisors do not need to obtain a registration with the Securities Exchange Commission or SEC in the USA. Investment advisors should also undergo continuous training programmes and mandatory certification programs. Any non-compliance with regulatory requirements leads to the imposition of penalties.