Are you planning to start an RIA in New Jersey? Get to know the state requirements in this article, including the documents you’ll need to submit for registration.
Who is required to register in the state of New Jersey?
- Advisors managing less than $100M in AUM (If more than $100M, advisors may also have to register with the SEC),
- The advisor is in New Jersey,
- Serving more than 5 clients in the state,
- Or actively marketing their financial services in New Jersey.
Key Takeaways from this article:
- Save time and prevent clerical errors by hiring a compliance consultant to file registrations. If not possible, this article goes over the financial statement and document requirements an advisor must provide when registering in New Jersey.
- New Jersey requires advisors to meet the licensing requirements or designations: Series 65, Series 66 & Series 7 combined, or have CFP, CFA, CIC, CHFC, or PFS designation.
- This state requires that each investment advisor representative submit form U-4 and ADV Part 2B.
Must pass Series 65, Series 66 & 7 combined or have the appropriate designation.
New Jersey, as well as most states, require these licenses or designations that enable financial professionals to become licensed advisors or planners::
- Series 65
- Series 66 and 7 combined
- Or have CFP, CFA, CIC, ChFC, or PFS designation
Forms & Policies required by New Jersey
- All filing fees are due at registration
- Acquire FINRA entitlement paperwork
The state uses FINRA's WebCRD/IARD system to process applications, so advisors must apply to FINRA to receive an account in the online system. FINRA does not regulate or supervise RIAs. The system is only used for processing applications in New Jersey.
- Form ADV Part 1 (online portion)
Part 1 of Form ADV discloses information about the advisor's firm. In this portion, advisors will include business and ownership structure, any affiliations related to business practices, clients, and additional information about employees.
Essentially, this is where an advisor explains how the RIA runs its business. Also, part one is used for uploading ADV part 2A (firm's brochure) and Part 2B (brochure supplements).
- Form ADV Part 2A (paper and online)
This is the firm's brochure. It lists the services the firm offers, fees, disciplinary disclosures, and other details about the firm. The brochure must be given to all clients and prospects. New Jersey requires that this form be written in plain English, so clients and prospects can easily understand it.
- Form ADV Part 2B (paper and online)
This is another brochure that's given to the clients. This varies from Form ADV 2A because the advisor will disclose information about themselves here. ADV 2B contains educational history, employment, conflicts of interest, and disciplinary information.
Anyone giving investment advice to clients, including Executive Officers at the firm, must have a Form ADV Part 2B.
- Policies and Procedures Manual
This manual helps RIAs maintain and enforce the firm's internal policies across the business. It must include the process from training new IARs to handling client complaints. The Policies and Procedures manual must also include the Business Continuity Plan, Anti-Insider Trading Policy, Anti-Money Laundering Policy, and Information Security Policy..
- Code of Ethics
The Code of Ethics shows the state of New Jersey that the advisor meets the state's ethic standards when conducting business.
- Client Advisory Contract
This details the relationship between an advisor and their clients and must meet the regulatory authority standards for client advisory contracts in New Jersey.
No matter what state an advisor is trying to set up their firm, it can be slightly overwhelming without the proper guidance. That’s why our team put together this comprehensive launch kit. Download it now and get everything you need to launch your RIA successfully.
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*Altruist and its affiliates do not provide legal advice, so it’s important to check with a qualified professional for each state’s registration requirements.