# What Is an Investment Advisory Representative (IAR) and What Do They Do?

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> **Definition**
>
> Investment advisory representatives (IARs) are licensed professionals who work for investment advisory companies and provide personalized investment advice and financial planning services to individuals and businesses.

An investment advisory representative (IAR) is a professional who gives investment advice and manages client accounts. To become an IAR, individuals must register and get licensed by passing exams, such as the Series 63 and Series 65. Their main responsibilities include offering investment recommendations and overseeing client portfolios, while acting in their clients' best interests. IARs must also register with state regulators or the SEC, depending on the scope of their services.

### Key Takeaways

*   IARs are licensed professionals who work for RIAs and provide personalized investment advice and financial planning services, ensuring clients receive tailored recommendations.  
    
*   To become an IAR, candidates must pass key exams like Series 63 and Series 65 and register with the SEC or relevant state authorities, meeting strict regulatory requirements.  
    
*   IARs adhere to a fiduciary standard, prioritizing clients' interests above their own and maintaining transparency about potential conflicts of interest.  
    
*   They play various roles, from managing client accounts and making investment recommendations to supervising other IARs and offering advisory services to the public.  
    
*   Attaining advanced designations like CFP or CFA, while not mandatory for IARs, can enhance expertise and career opportunities in the investment advisory field.

## Detailed Overview of Investment Advisory Representatives

[IARs](https://www.investopedia.com/terms/r/ria.asp#:~:text=An%20IAR%2C%20on%20the%20other,to%20the%20same%20fiduciary%20standards.) are individuals employed by or associated with an [RIA](https://www.investopedia.com/terms/r/ria.asp) firm. They advise clients on securities, manage client accounts or portfolios, determine which recommendations or advice should be given, receive compensation, or supervise employees who perform these duties.

IARs serve as the face of investment advisory firms, working directly with clients as financial advisers and planners and using their expertise to help guide client portfolios.

Here are some of their key responsibilities:

*   **Recommendations**: IARs analyze research produced by their firm and use their knowledge and judgment to suggest various securities to their clients.
*   **Managing client accounts**: IARs handle all aspects of account management, from overseeing [discretionary accounts](https://www.investopedia.com/terms/d/discretionaryaccount.asp) to addressing administrative issues. For example, an IAR may request additional funds from a client to settle an outstanding trade.
*   **Providing advisory services**: IARs offer general investment advice to the public, such as presenting daily market reports in the media.
*   **Supervising other IARs**: Experienced IARs may be responsible for managing and training junior team members, ensuring they follow regulations and monitoring their investment advice.

> **Important**
>
> A registered investment advisor (RIA) is a firm, while an IAR is the individual representing the firm. They are only interchangeable if a sole person forms an RIA.

## Differences Between RIAs and IARs

Contrary to what many people think, a registered investment advisor (RIA) isn’t a person or profession. An RIA is a firm registered with the SEC or state securities administrators to provide advisory services to clients. The individuals who execute this service for this firm, the RIA, are the IARs.

The number of IARs has more than doubled since 2000.

## Essential Requirements to Become an IAR

IARs must meet these key requirements to maintain industry integrity and avoid fines:

*   **Registration**: IARs must register with the appropriate state authorities in the states where they provide investment advice. In most states, this involves filing Form U4, the uniform application for securities industry registration, through the Central Registration Depository ([CRD](https://www.investopedia.com/terms/i/investment-adviser-registration-depository-iard.asp)) system.
*   **Minimum qualifications**: IARs can only offer advice on topics for which they have passed the relevant examinations. These exams may include the Uniform Investment Adviser Law Examination ([Series 65](https://www.investopedia.com/articles/professionaleducation/11/intro-series-65-exam.asp)) or the Uniform Combined State Law Examination ([Series 66](https://www.investopedia.com/terms/s/series66.asp)), depending on the specific requirements of the states in which they operate.
*   **Work with an RIA**: IARs must be employed by or associated with an [RIA](https://www.investopedia.com/terms/r/ria.asp) firm that is registered with the SEC or the appropriate state authorities, depending on the firm's AUM and the number of clients it serves.
*   **Fiduciary duties**: Investment advisers are bound to a fiduciary standard from the [Investment Advisers Act of 1940](https://www.investopedia.com/terms/i/investadvact.asp). The act defines stipulates advisers have a duty of loyalty and care, which means that the adviser must put the client’s interests above their own.
*   **Disclosure**: IARs must reveal any risks or potential conflicts of interest related to any transactions or investments they recommend to clients.
*   **Documentation**: To comply with SEC record-keeping regulations, IARs must maintain detailed records of their interactions with clients, investment recommendations, and other relevant information, providing a clear audit trail.

## Core Qualifications for Investment Advisory Representatives

To expand their knowledge of financial products and principles and for career advancement, many IARs work to attain either the [certified financial planner](https://www.investopedia.com/terms/c/cfp.asp) or [chartered financial analyst](https://www.investopedia.com/terms/c/cfa.asp) designation. These are not required to be an IAR but provide more evidence of an IAR's expertise.

IARs in most states are typically required to pass the [Series 63](https://www.investopedia.com/terms/s/series63.asp) and/or [Series 65 exams](https://www.investopedia.com/terms/s/series65.asp). The FINRA-administered exam consists of 130 scored questions, which candidates have 180 minutes to complete. As an alternative to passing the Series 65 exam, IARs may pass the [Series 66](https://www.investopedia.com/terms/s/series66.asp) and [Series 7](https://www.investopedia.com/terms/s/series7.asp) exams.

Some states allow for the substitution of licensing credentials. For example, an individual may not have to pass the Series 65 exam if they hold a CFP designation. IARs may also have continuing education requirements depending on their jurisdiction.

## What Does an IAR Do?

An IAR is a specific type of financial advisor that provides general advice to clients, oversees their accounts, and provides advisory services to external parties.

## How Do I Become an IAR?

You can become an IAR by creating an account with the IARD. Once your account is open, your firm can submit [Forms ADV](https://www.investopedia.com/terms/f/form_adv.asp) and U4 with the SEC and any relevant states.

## What Are the Benefits of Becoming an IAR?

Becoming an IAR legitimizes your status and knowledge as a financial advisor. It also enables you to work for an RIA.

## The Bottom Line

Investment advisory representatives (IARs) are financial advisors who specialize in investing matters and offer investment advice to clients.  For a fee, IARs working for a registered RIA make recommendations, build portfolios, and manage client accounts.

Not just anyone can do this job. To be considered an IAR, you must pass various exams and obtain the required credentials. IARs can only offer advice on topics for which they have passed the appropriate examinations.

> **Article Sources**
>
> 1.  U.S. Securities and Exchange Commission. “[General Information on the Regulation of Investment Advisers](https://www.sec.gov/investment/divisionsinvestmentiaregulationmemoiahtm).”
>     
> 2.  Kaplan Financial. "[RIA vs IAR: What Is The Difference](https://www.kaplanfinancial.com/resources/getting-started/ria-vs-iar-whats-the-difference)."
>     
> 3.  Investment Adviser Registration Depository. "[Welcome to the Investment Adviser Registration Depository](https://www.iard.com/)."
>     
> 4.  Financial Industry Regulatory Authority. "[Form U4 Instructions](https://www.finra.org/sites/default/files/AppSupportDoc/p015111.pdf)."
>     
> 5.  U.S. Securities and Exchange Commission. "[Information for Newly Registered Investment Advisers](https://www.sec.gov/divisions/investment/advoverview.htm)."
>     
> 6.  U.S. Securities and Exchange Commission. "[Standards of Conduct for Broker-Dealers and Investment Advisers: Care Obligations](https://www.sec.gov/tm/standards-conduct-broker-dealers-and-investment-advisers)."
>     
> 7.  North American Securities Administrators Association. "[Investment Adviser: FAQS](https://www.nasaa.org/industry-resources/investment-advisers/ia-faqs/)."
>     
> 8.  Financial Industry Regulatory Authority. "[Series 65 – Uniform Investment Adviser Law Exam](https://www.finra.org/registration-exams-ce/qualification-exams/series65)."