The IAR CE requirement has quickly taken the investment advisory industry by storm, as more and more states continue to adopt the model regulation each year. This comprehensive FAQ addresses critical aspects of the requirement, including affected professionals, implications for dually registered individuals, and strategies for firms to support their IARs. Whether you’re an adviser, compliance officer, or firm leader, this guide provides essential insights to help you successfully navigate and meet these new regulatory obligations before the year-end deadline.

What are the specific requirements for IAR CE?

Investment Adviser Representatives (IARs) must complete annual Continuing Education (CE) to maintain their registration.

Key requirements include:

  • 12 CE credits required yearly
  • 1 credit = at least 50 minutes of educational instruction (vendor must be approved by NASAA)

The 12 credits must be divided as follows:

  • 6 credits in Products and Practices
  • 6 credits in Ethics and Professional Responsibility

It’s crucial to note that this split is mandatory. IARs cannot satisfy the requirement by obtaining more credits in one category and fewer in the other, even if the total reaches 12 credits.

What are the Requirements for Dually Registered IARs?

For IARs who are also registered Broker-Dealer (BD) agents, FINRA’s Regulatory Element CE can count towards the 6 credits of Products and Practices.

Important notes:

  • This applies only to the Products and Practices portion of IAR CE
  • IARs/RRs must still complete 6 credits of Ethics and Professional Responsibility
  • The Ethics credits must be NASAA-approved IAR CE

This arrangement allows dually registered IARs/RRs to avoid duplicating efforts while still meeting both FINRA and IAR continuing education requirements.

Who is Required to Comply with IAR CE?

IAR CE requirements apply to:

  • Every IAR registered in a jurisdiction that has adopted the model rule. The program covers IARs of state & federal-registered investment advisers.

Key points about applicability:

  • Based on IAR registration, not firm registration
  • Applies regardless of:
    • IAR’s domicile
    • Firm’s registration location
    • Firm’s notice filing location

Many believe the requirement is triggered by the IA firm’s registration or notice filing location, but this is incorrect. The CE requirement is determined solely by where the IAR is registered, not by any firm-level factors or the IAR’s physical location.

Are IARs required to take specific courses?

 IARs have flexibility in choosing their CE courses:

  • No specific courses are mandated
  • IARs can select approved courses that:
    • Appeal to their interests
    • Align with their business models

The program is designed to provide maximum flexibility, allowing IARs to select approved courses that best align with their interests and work while still meeting the necessary requirements.

What happens if you miss the December 31 deadline?

Failing to meet the December 31st IAR CE deadline has consequences. While the registration renewal fee is still due, the IAR’s status changes to “CE Inactive” in CRD. This status is publicly visible on the Investment Adviser Public Disclosure (IAPD) and BrokerCheck, serving as a warning. If the CE requirement remains unfulfilled by year-end, the IAR risks being unable to renew their registration.

What states have adopted IAR CE?

As of today, 19 states have implemented IAR CE requirements. This means registered Investment Advisers in these states must complete 12 credits or NASAA-approved training by December 31st. To learn which states have adopted these requirements, click here.

For more information on Quest CE’s IAR CE solution, click here.