Investment Advisor Representative (IAR)

An IAR, or investment advisor representative, is someone who provides advice or assists in the buying and selling of securities.

The IAR is the person that clients will actually be working with because they are employed by a firm that provides financial advice.

The individual IARs may have varied degrees of training in different fields of finance and investing, but firms generally require them to take continuing education courses throughout their career to maintain active status.

Difference Between IAR’s and Financial Advisors

IARs are not the same thing as financial advisors.

In the case of a financial advisor, they may or may not be working for a firm that provides investing advice, and they provide assistance in many other areas aside from how to invest.

An IAR works at a registered investment advisory firm while acting as an agent of the client. They are regulated by FINRA or the SEC, depending on whether they work at a lien or an investment advisor.

IAR Responsibilities

The responsibilities of an IAR fall into three categories: providing client service, compliance, and product expertise.

Providing Client Service

Client service is the most important responsibility and includes:

  • Gathering and understanding client needs
  • Setting up the appropriate asset allocation based on the client’s goals, risk tolerance, time horizon, etc.
  • Monitoring portfolio performance against milestones to ensure that objectives are achieved
  • Educating clients on investment products and services and how they can be used to reach their goals

Compliance

The IAR is required to observe the regulatory requirements. Some of these include:

  • Notifying clients and firms with whom investments will be placed that he or she is investing on the client’s behalf
  • Obtaining client signatures for trade confirmations, account opening forms, and investment documentation
  • Maintaining accurate and organized records of all transactions performed on behalf of clients
  • Keeping up with continuing education to stay abreast of financial innovations and changes in the industry

Product Expertise

Evaluating products is an important part of advising as well. The IAR must:

  • Follow company policies when recommending company-provided products
  • Recommend products that are in the best interest of clients according to his or her fiduciary duty, even if not provided by the company

Professional Designations & Certifications

While there is no licensing requirement for IARs, there are a number of professional designations and certifications available for investment advisors.

Working towards one of these can be a good way to distinguish yourself from other IARs in the industry. These include:

  •  Series 7 certification from the Financial Industry Regulatory Authority (FINRA)
  • Series 65 certification from the Financial Industry Regulatory Authority (FINRA)
  • Chartered Financial Analyst designation
  • Accredited Investor designation

IAR Qualifications

While different firms may have their own criteria for hiring IARs, FINRA has registration requirements that must be met.

IARs need to meet the following qualifications:

  • 18 years old
  • The candidate should pass the Series 7 and Series 65 exams along with any other exams required by state securities regulators
  • Should be of good moral character and reputation
  • Have a high school diploma or GED
  • Be fluent in English

It’s also important to note that some states require those applying for licensing as an IAR to have six months experience as a registered employee with a financial services firm.

How an IAR Makes Money

The IAR may be paid by the company that provides financial advice, rather than directly from clients. This makes it important to have a Fiduciary Relationship with the advisor.

Most firms will pay their employees on salary, though some also offer a bonus or commission for exceeding certain performance thresholds or special tasks.

Some of the most common IAR salary rates include:

  • $100,000 – $250,000
  • $50,000 – $150,000

Benefits of Being an Investment Advisor Representative

There are several benefits to being an IAR, both personal and professional.

Benefits_of_Being_an_Investment_Advisor_Representative

Personal Benefits

Some of the biggest personal benefits include making a difference in clients’ lives, advancing your career, and gaining self-satisfaction.

Personal Satisfaction

This career also allows you to work independently with little supervision which can translate into greater job satisfaction and a high degree of professional autonomy.

Advancing Your Career & Making a Difference in Clients’ Lives

IARs help people make informed financial decisions, not only for their future, but for the well-being of their family and loved ones.

Professional Benefits

The ability to earn a higher income than some other financial advisors is one of the more obvious benefits associated with this profession.

Final Thoughts

Having a financial advisor representative as part of your investment team can be a great asset to help you meet your long-term goals.

The professional will analyze your financial situation and determine what investments will give you the best chance at maximizing returns while keeping risk levels low.

An investment advisor representative, or IAR, is a person who provides financial advice to clients. They are hired by the client or financial institution they work for.
A financial advisor is someone who works for a company or firm that offers investment services to clients. They provide investment advice and often have experience in portfolio management. A representative can either be an IAR or broker-dealer. An IAR's job is to offer advice to clients and communicate with them on a regular basis. They also need to take care of the paperwork needed to get things done for client accounts.
The responsibilities of an IAR fall into three categories: providing client service, compliance, and product expertise.
Yes, all IAR's must register and become licensed through FINRA.
IARs can expect to earn between $50,000 and $250,000 per year. This would be considered the lower end of the spectrum for advisors working in retail shops with little experience. Financial firms pay higher salaries because they require their employees to have more experience.

Disclaimer: The above references an opinion and is for information purposes only. It is not intended to be investment advice. Seek a duly licensed professional for investment advice.

True Tamplin, BSc, CEPF®

About the Author
True Tamplin, BSc, CEPF®

True Tamplin is a published author, public speaker, CEO of UpDigital, and founder of Finance Strategists.

True is a Certified Educator in Personal Finance (CEPF®), a member of the Society for Advancing Business Editing and Writing, contributes to his financial education site, Finance Strategists, and has spoken to various financial communities such as the CFA Institute, as well as university students like his Alma mater, Biola University, where he received a bachelor of science in business and data analytics.

To learn more about True, visit his personal website, view his author profile on Amazon, or check out his speaker profile on the CFA Institute website.