NASAA’s investment adviser representative (IAR) CE regulation has gained momentum over the past year as more states adopt the model rule that was first introduced in 2020. The regulation mandates investment advisers to complete continuing education credits annually, with consequences for those who fail to comply before the annual December 31st deadline.

Despite the rule being in effect for three years, many IARs are either in their first year of compliance or preparing for it to begin next January. Whether this is your first time around the IAR CE block or completing your third year of compliance, questions and concerns are bound to arise. To provide clarity, here are 10 frequently asked questions about IAR CE to simplify the process for you.

1.) Who does the IAR CE program apply to?

Every investment adviser representative (IAR) registered in a jurisdiction that adopts the model rule will be subject to its CE requirements. The mandatory CE program will apply to all registered IARs of both state-registered and federally covered investment advisers. IARs will be required to meet the CE requirements of any state in which the IAR is registered.

2.) How many credits/hours are required?

IARs must attain 12 CE credits each year by December 31st to maintain their IAR registration. A “credit” is a unit that has been designated by NASAA to be at least 50 minutes of educational instruction. The 12 credits must include 6 credits of Products and Practices and 6 credits of Ethics and Professional Responsibility.

3.) What is the passing exam score for IAR CE?

Every course must have an assessment that is at least 10 questions in length. There is also a requirement that IARs pass assessments with a score of at least 70% within no more than three attempts.

4.) Can I complete the same course in two successive renewals?

Duplicate courses will not count toward the IAR CE requirement, even if completed in another year. However, a duplicate course that has been updated with a new course number will provide the IAR with CE credit for that course. Every course that is taken must have a unique course ID. The course ID will be available to the IAR so they can review that against their own records.

This is why Quest CE authors all-new content each year, to avoid duplicate course assignments and/or submissions.

5.) Which states have adopted NASAA’s IAR CE model rule?

For an up-to-date list, visit our blog article, “Which States Have Adopted the IAR CE Requirement?”

6.) Who reports the course/exam completion?

The course vendor/provider (that’s us!) reports course completion to FINRA, NASAA’s vendor for program tracking. There is a $3 per credit reporting fee that is also required by NASAA.

7.) What happens if an IAR does not complete CE on time?

If an IAR does not complete the CE requirement by the annual deadline of December 31st, the IAR will pay the registration renewal fee and CRD will set his or her IAR CE status to “CE Inactive,” which will then appear in the Investment Adviser Public Disclosure (IAPD) and BrokerCheck. CE Inactive is a notice to the IAR that if CE is not completed by the end of the year, the IAR will be unable to renew his or her registration.

8.) Will I receive reciprocity in other states if I comply with my home state?

An IAR registered in another state who is also registered as an IAR in his or her home state is in compliance if the home state has CE requirements that are at least as stringent as the model rule and the IAR is in compliance with the home state’s IAR CE requirements.

9.) Can I count my FINRA Regulatory Element continuing education towards my IAR CE requirement?

Yes, you can use FINRA’s Regulatory Element course towards the Products and Practice component of your IAR CE requirements. Please note, you must speak with your broker-dealer to determine if they want to report it on your behalf or if you should self-report your course completion through FinPro and pay the applicable reporting fee of $18 ($3 per credit hour times six credits).

For more details on how this works, visit our blog article, “How to Apply Regulatory Element CE to IAR CE.”

10.) Are any IARs exempt from CE requirements based on factors such as length of experience and/or professional designations?

No. There are no exemptions or waivers available based on experience or other qualifications.

To read the official regulation from NASAA, click here.