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Regulation and Compliance > State Regulation > NASAA

NASAA Proposes CE Requirement for Investment Advisor Reps

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The North American Securities Administrators Association is seeking comments on creating a continuing education program for investment advisor representatives.

NASAA’s board-level Investment Adviser Representative Continuing Education (IAR CE) Committee has developed a framework for a program and is working closely with NASAA’s Investment Adviser Section’s IA Regulatory Policy and Review Project Group to draft a proposed model rule to implement that framework.

Christopher Gerold, NASAA president and chief of the New Jersey Bureau of Securities, said the CE program proposes “a responsive and relevant continuing education program to help investment adviser representatives better serve their clients and keep their skills sharp by remaining knowledgeable of current regulatory requirements and best practices.”

Comments will be taken on the plan until March 30.

NASAA is proposing an annual IAR CE requirement under which IARs would be required to complete 12 total hours of CE — 6 hours focused on Products and Practice and 6 hours focused on Ethics and Professional Responsibility.

The Products and Practice component would ensure ongoing knowledge and competency related to investment products, strategies, standards and compliance practices relevant to the investment advisory industry, according to NASAA.

The Ethics and Professional Responsibility component is designed to ensure “ongoing knowledge and competency related to an IAR’s duties and obligations to his or her clients, including, but not limited to, issues related to the fiduciary duty owed to each client.”

IARs “play an important role in the financial lives of millions of Americans, yet unlike most financial services professions they are not required to meet a continuing education requirement to maintain their licenses to work with investors,” said Indiana Securities Commissioner Alex Glass, chair of NASAA’s Investment Adviser Section.

Working with a leading education and testing vendor, NASAA in 2017 surveyed state securities regulators about an IAR CE program.

Given the strong support among state securities regulators, NASAA says, it launched the industry-focused survey in early 2018 and met with industry and regulatory stakeholders to discuss IAR CE. “This outreach also demonstrated significant support for the creation of a mandatory IAR CE program.”

Linda Cena, chair of NASAA’s IAR CE Committee and Examination and registration manager for the Michigan Corporation, Securities and Commercial Licensing Bureau, added that “this type of regulatory initiative benefits greatly from input. We look forward to receiving additional feedback through the public comment period to ensure that any final continuing education program and accompanying model rule properly addresses both investor protection and industry impact.”

— Check out Demystifying RIA/IAR Legal Requirements on ThinkAdvisor.


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