From the March 2007 issue of Investment Advisor • Subscribe!

The Registration Numbers

More On Legal & Compliance

from The Advisor's Professional Library
  • RIAs and Customer Identification Just as RIAs owe a duty to diligently protect their clients’ privacy and guard against theft, firms also play a vital role in customer identification. Although RIAs are not subject to an anti-money laundering rule, securities regulators expect advisors to address these issues in their policies and procedures.
  • Conducting Due Diligence of Sub-Advisors and Third-Party Advisors Engaging in due-diligence of sub-advisors isn’t just a recommended best practice— it is part of the fiduciary obligation to a client. An RIA should be extremely reluctant to enter a relationship with a sub-advisor who claims the firm’s strategy is proprietary.

Here's a breakdown of how, and where, advisors and brokers are registered. The numbers were presented by Melanie Lubin, Maryland's Securities Commissioner, at the ALI-ABA investment advisor regulation conference in Washington in late January.

- 24,481 total advisors are listed on the Investment Adviser Registration

Depository (IARD)

- 10,977 advisors are SEC registered only

- 192 advisors are dually registered with the states and SEC

- 13,312 are state registered advisors

- 1,109 firms are B/Ds and advisors

- 225,000 are B/D reps

- 200,000 reps are also registered as B/D agents

- 4,000 reps are associated with both state and federally registered firms

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