Ethics for the Investment Adviser Representative


For the past several years, regulators in the securities industry have been increasingly disturbed by the apparent lack of understanding of the ethical duties of registered investment advisers and their investment adviser representatives. In an effort to increase IAR understanding, the North American Securities Administrators Association (NASAA) proposed a Model Rule on Investment Adviser Representative Continuing Education for adoption by the various states under section 404 of the 2002 Act (or 201 of the 1956 Act) to give IARs a heightened awareness of and responsibility for understanding their ethical responsibilities, a responsibility which is practical in requiring additional coursework and time, and ethical in requiring a greater understanding and implementation of the heightened ethical standards now imposed on IARs.

The purpose of this course is to give registered investment adviser representatives (IARs) a thorough explanation of, and orientation to, the ethical and professional responsibility rules and duties with which they must comply to perform their jobs. The course will explain the various common law and statutory sources of IAR ethical standards, focusing mainly on fiduciary duties. It will also examine the NASAA Model Rule and its relation to the ethical requirements for IARs, the history and meaning of the fiduciary standard, ethical requirements under federal law and regulation, the professional, ethical obligations under the various state securities acts and regulations. It will conclude by examining the relationship of each of these to requirements under the rules and regulations of the Financial Industry Regulatory Authority (FINRA), particularly for those who are dually registered, and the rules of the various bodies which issue and govern securities industry professional credentials.

Learning Objectives

Upon conclusion of this course, you should have a solid understanding of:

  • the nature and history of fiduciary relationships and the ethical duties created by them
  • the fiduciary and ethical requirements of the Investment Advisers Act of 1940 (Advisers Act)
  • fiduciary and ethical requirements of the various state securities acts
  • the fiduciary requirements of ERISA and other statutes which impact the conduct of IARs
  • the NASAA Model Rule CE requirement and its ethics component
  • what rules govern the conduct of dually registered individuals
  • how the CE requirements of other organizations may impact your obligations under the SEC Code of Ethics Rule and how those obligations relate to your overall ethical duties
  • the relationship between other statutes and regulations, such as the Department of Labor [[investment advice]] rule for retirement accounts how that relationship might impact your duties and responsibilities

Designed For

Designed for Investment Adviser Representatives

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