What’s the Deal with IAR Continuing Education Requirements?
Main Contributor: Joe Reilly, Compliance Associate
We know you’ve got questions: Does it apply to me? What do I need to do and how do I do it? Where do I look? Don’t worry, we’ve got answers.
Background
Over the last few years, certain U.S. states have adopted a model rule for continuing education (“CE”) that was developed by the North American Securities Administrators Association (“NASAA”). In short, this rule means that any investment adviser representative (“IAR”) registered in one of those states needs to complete continuing education requirements on an annual basis. The rule applies to IARs who work for both SEC-registered and state-registered firms. The education requirements are two-pronged, with a) an ethics component, and b) a products and practices component. The full text of the NASAA model rule is here but we’ve outlined below what you as an IAR need to know.
Does this Apply to Me?
It all depends on the states in which you’re individually registered. Luckily, the FINRA portal can run a report automatically of whether the IAR CE requirements apply to you. If you don’t have access to or can’t login to your firm’s portal, then skip the FINRA Portal section of this article and jump right to Checking IAR Requirements Manually.
Using the FINRA Portal to Check IAR Requirements
Log into your advisory firm’s FINRA portal.
On the main page, there’s a dark blue ribbon on the left side. Within this ribbon select the fourth link down: ‘Reports.’
Select ‘Continuing education,’ and then ‘IAR CE Report’.
What number appears after ‘Total count’? That’s the number of IARs at your firm in states with CE Requirements. If it’s 0, your IARs don’t have any CE requirements currently. However, you should keep checking this page every year, particularly in January as more states join the model rule. The implementation date for all states has historically been the 1st day of the year following the adoption of the model rule. After that year, IARs who have still not completed the requirements have one more year as ‘CE Inactive’ until their registration terminates.
If the number after ‘Total count’ is not ‘0,’ check under ‘IA CE Requirement Code.’ ‘COMPLETE’ means that the IAR has completed their IA Continuing education for that year. ‘INCOMPLETE’ means that IAR has some work to do (check out “How Do I Actually Complete the CE Requirements” section). If the IA CE Status Code notes “INACTIVE” that IAR should complete the CE as soon as possible. ‘NOTREQUIRED’ means, for one reason or another, that IAR doesn’t have to complete any continuing education for that year. This is often because, for many states, an IAR who is newly registered in the state is not subject to the CE requirements until the next calendar year.
Note: If you’re having trouble viewing the IAR CE Report, you could instead check each IAR’s registrations manually by identifying the states in which they are approved for registration: On the main page of the FINRA Portal, within dark blue ribbon on the left side, select the second link down that says ‘Profiles’. Then click on the arrows under ‘Registrations’ for each IAR. It will show you the states in which each IAR is approved for registration. Match this up with the list of states that require IAR CE. Check the FINRA portal before completing continuing education to make sure it’s required for you.
Checking IAR Requirements Manually
If you can’t access the FINRA portal, you can check manually on IAPD the states in which you are individually registered. Search your name or your 7-digit CRD Number on https://adviserinfo.sec.gov/. The states that appear under “License(s)” next to the green ‘IA’ circle are the states in which you are individually registered. Compare those states with the IAR CE list.
What is the NASAA Model Rule?
An IAR subject to the model rule must complete 6 credits (1 credit = at least 50 minutes) of Regulatory and Ethics Content as well as 6 credits of Products and Practice Content offered by an Authorized Provider. At least 3 of those credit hours must cover Ethics. Regulatory and Ethics focuses on the IAR’s duties and fiduciary responsibilities as an IAR. Products and Practices focuses on knowledge of investment products, standards and practices in the investment advisory industry.
An IAR who is also a registered representative of a Broker-Dealer who complies with FINRA’s continuing education requirements may not have to complete the 6 credits of Products and Practice Content.
An IAR who maintains one of these professional designations in good standing can use the continuing education needed to maintain that designation to complete the CE requirements as long as a) it meets the minimum credit requirements listed above, b) it is offered by an Authorized Provider, c) it is completed for the relevant year as a condition for maintaining the designation, and d) the completion is reported through the FINRA system (see the “Reporting the Completion of the CE Credit Requirement” section).
Certified Financial Planner (“CFP®”)
Chartered Financial Consultant (“ChFC”) or Masters of Science and Financial Services (“MSFS”) awarded by the American College, in Bryn Mawr, Pennsylvania.
Chartered Financial Analyst (“CFA”)
Personal Financial Specialist (“PFS”)
Chartered Investment Counselor (“CIC”)
Not completing the CE requirements in a certain year means that the IAR’s registration will renew as ‘CE Inactive’ or ‘Approved Pending IAR CE’ for the next year. If the IAR doesn’t complete it by the end of the calendar year after that, their registration will terminate.
For example: If the IAR CE Requirement goes into effect where an IAR is registered on January 1, 2022, and the IAR doesn’t complete any continuing education that year, then on January 1, 2023, the IAR will be ‘CE Inactive’ or ‘Approved Pending IAR CE’ for a year. The IAR’s registration holds for another year, until January 1, 2024. If the IAR still hasn’t completed the continuing education by that date, their registration will be terminated in that state.
If multiple states in which the IAR is registered require continuing education, the IAR will only need to complete 12 credits in total per year. They do not need to complete 12 different credits for each state in which they are registered.
Extra CE credits do not carry over from year to year.
If an IAR de-registers for a period of time in a certain state and then re-registers as an IAR there later, that IAR needs to complete all IAR continuing education requirements for all the reporting periods that occurred during the time the IAR was temporarily de-registered.
How Do I Actually Complete the CE Requirements?
You will need to do two things:
Attend CE classes from authorized providers, and
Ensure the CE providers report your credits in FinPro.
Completing the CE Requirement
You can sign up for a continuing education program via this list of Authorized providers.
AdvisorLaw, LLC
Affordable-Success-First Choice-ClienTell
Brett Danko Educational Center, LLC
Broker Educational Sales & Training, Inc.
CalCPA Education Foundation
Carlin Calcaterra
Celsinus Partners
CFA Institute
CFM Partners, Inc.
CLSA Board of Standards
Exchange Analytics
Financial Experts Network
Garrett Planning Network (S17379)*
iCapital
Innova Learning and Bates Group
Kaplan
Kestra Financial*
Kitces
Merrill Lynch, Pierce, Fenner & Smith Inc.*
Mission Critical Services
MTradecraft
NASAA
Pass Perfect, LLC.
Quest CE
RegEd
RIA Compliance Consultants
RIA in a Box
Ruiz Consulting LLC
Securities Training Corporation
Sheltowee Foundation, Inc.
Solomon Exam Prep
SS&C Learning Institute
Stoops Center of Law and Business.
WebCE
Wisconsin Department of Financial Institutions – Division of Securities
*This provider restricts their courses to either their employees or to certain firms.
Please note: Every course offered by the above course providers may not be approved IAR CE content.
The above course list is current as of the published date of this article.
Reporting the Completion of the CE Credit Requirement
Signing up for FINRA’s Financial Professional Gateway (“FinPro”) will allow you to manage your registration information and report your completed continuing education credits. Click ‘Create an Account’ to begin the process. The course provider reports successful completion to both you and to FINRA, but you are responsible for ensuring that your provider does this. The provider will pay a $3 reporting fee per credit hour. If you have any questions, FinPro’s FAQ Page may be able to help.
Which States have Adopted the Model Rule?
As of the published date of this article, here is a list of the states that have adopted the model rule as of what date. However, this list continues to grow, so please make sure to check the NASAA current list:
1/1/2022 effective date
Maryland
Mississippi
Vermont
1/1/2023 effective date
Arkansas
Kentucky
Michigan
Oklahoma
Oregon
South Carolina
Washington, D.C.
Wisconsin
1/1/2024 effective date
Colorado
Florida
Nevada
Tennessee
Professional Designations
In the states listed below, credits obtained pursuant to maintaining certain professional designations can also be used to complete the CE Requirements. These designations are the CFP®, CFA, PFS, ChFC, and CIC. However, IARs must be sure that the CE they complete to maintain these designations a) meets the minimum requirements, b) is offered by an Authorized Provider, c) is completed for the relevant year as a condition for maintaining the designation, and d) is reported through the FINRA system:
Arkansas
Colorado
Maryland
Michigan*
Mississippi
Nevada
Oklahoma
Oregon
South Carolina
Tennessee
Vermont*
Washington, D.C.
Wisconsin
*These states also allow credits IARs earn to maintain the MSFS, awarded by the American College in Bryn Mawr, Pennsylvania, to count for the IAR CE requirements, as long as (a) – (d), above, apply.
It is unclear whether the following states would deem credits completed pursuant to maintaining the above professional designations sufficient for completing the CE requirements, even if (a) – (d), above, apply. IARs who are registered in these states and have a professional designation should access the FINRA portal directly to check their continuing education requirements (see the “Using the FINRA Portal to Check IAR Requirements” section).
Kentucky
Florida
Caution
Something to keep in mind, especially if you’re at an SEC-registered firm, is that if you’re individually registered in a state you aren’t required to be registered in, you need to complete the continuing education requirements for that state to maintain registration there. Failure to do so would lead to eventual de-registration in that state. If you ever need to be registered in that state later on, you would need to complete all required continuing education for the period during which you weren’t registered (or, alternatively, you could re-take the Series 65 Exam or get a waiver from the securities regulator).
Conclusion
We hope this article gives you an idea of what’s required and how to accomplish it. As a note, most states allow for a discretionary waiver of the continuing education requirements by the Securities Commissioner or an equivalent position, but it is unclear how that may be used in practice. Overall: keep in mind that states are implementing the model rule at a rapid pace– for example, Florida joined as this article was being written. So if your state isn’t on this list, please keep checking it annually in January! If you have any questions overall on IAR continuing education, check out this link from NASAA for more information: