Investment advisor representatives in several states will have continuing education requirements for the first time.
The states have adopted a regulation that requires all IARs registered in their jurisdiction to complete 12 credit hours of courses — six hours in products and practice and six hours of ethics — by the end of the year. The states where the rule went into effect as of Jan. 1 are Arkansas, Kentucky, Maryland, Michigan, Mississippi, Oklahoma, Oregon, South Carolina, Vermont and Wisconsin. The rule's also in effect in Washington, D.C.
The regulation is based on a model rule released by the umbrella group for state securities regulators — the North American Securities Administrators Association — in late 2020. Each state must approve the measure either through the legislative or regulatory process.
“NASAA’s IA Representative Continuing Education Committee is working to assist jurisdictions [with] the adoption process and we are pleased to see adoption of IAR CE continue to grow,” Linda Cena, chair of the NASAA committee and licensing manager in the Michigan Department of Licensing and Regulatory Affairs, said in a statement. “Currently 11 states have continuing ed requirements on the books and at least four other states are in the process of adopting a CE framework.”
The CE rule applies to all registered IARs of investment advisory firms that registered with a state as well as those that are registered on the federal level with the Securities and Exchange Commission, according to NASAA background on the rule.
Broker-dealers, who are overseen by the Financial Industry Regulatory Authority Inc., have long had CE requirements. Thanks to the NASAA model rule, IARs are now getting CE obligations as well.
“I think it’s terrific for Oregon and ultimately for anybody in Oregon who works with an investment advisor,” said Jeremy Solomon, president and co-founder of Solomon Exam Prep, which is located in Portland, Oregon, and owned by CeriFi. “It adds to the professionalization of the investment advisory business.”
Advisors in Oregon will have to sign up for and complete 12 credit hours of approved courses offered by firms that are approved by NASAA. Solomon Exam Prep is one of them.
A course that lasts one hour in real time will qualify for one credit hour of CE, Solomon said. Advisors taking the course must score 100% on a quiz taken during or at the end of the course to obtain the credit. No pre-course preparation is required.
“Everything that is tested is in the course,” Solomon said.
The courses can be taken online at the pace the advisor prefers.
Under the model rule, IARs who are dually registered as brokers would meet their state CE obligation if they obtain the CE that Finra requires for registered representatives. States also would accept CE required for certain financial advice credentials — such as the certified financial planner and chartered financial analyst marks — if the educational material is approved for IAR CE.
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