Investment Advisor Surety Bond
- Required of individuals who wish to provide financial and investment advice
- Required when applying for an investment advisor license
- Guarantees that advisors will act honestly and faithfully
- Protects the state and public from advisors who do not comply with regulations
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Investment Advisor Surety Bond Overview
The investment advisor surety bond, also known as a financial advisor bond, is required of those who wish to provide financial advice to consumers for a fee. The bond is required in many states, and must typically be submitted to the state Department of Finance or the Department of Commerce and Consumer Affairs.
This bond guarantees that those who offer financial and investment advice, or assist with financial planning, will do so in compliance with state regulations and in an honest, ethical, and reliable manner.
The investment advisor surety bond is an agreement between the investment advisor (the bond principal), the state (the bond obligee), and the surety company, which vouches for the advisor’s credibility and backs the bond financially.
If a financial advisor is found to be in violation of state regulations, or has acted dishonestly in providing investment advice, obligees can file a claim against their surety bond. The surety company then steps in and investigates the case, eventually compensating the claimant for their losses, if the claim is valid. The advisor must then indemnify the surety for its support, and repay any money it has paid to claimants.
For more details about the cost of investment advisor surety bonds, and how to get your bond, see the sections below.
Investment Advisor Surety Bond Cost
The rate, or cost, of your financial advisor bond depends on the specific bonding amount required in your state. A bond’s amount is the full amount of its coverage, which your surety may extend in the case of a claim.
The cost of your bond is significantly less, though: typically it’s only a small percentage of the whole amount.
The exact rate is determined by the surety bond company which backs the bond, when it reviews your application. The company will pay closest attention to your personal credit score. Companies also take into account and give weight to other indicators of your financial stability, such as:
- Your personal and business financial statements
- Your assets and liquidity
- Your work experience and record
The higher your credit score and the better these other indicators, the lower the cost of your bond. If you have a high score, you can expect to pay between 0.75% - 2.5% of the total bond amount for your investment advisor surety bond.
Your choice of surety bond agency can also have an impact on the cost of your bond. We at Bryant Surety Bonds work with a number of the best sureties in the country, all of which are A-rated and T-listed. By working with them, we have access to some of the lowest and most exclusive rates on the strongest bonds.
To proceed with getting your bond, follow the application link and submit your bond application form. We’ll get back to you right away with your free surety bond quote. If you have any questions concerning bonds, how to get bonded or anything else, call us at (866)-450-3412 anytime.
Bad Credit Bonds
Applicants with lower credit scores are sometimes turned down by other sureties, because they are considered riskier to issue bonds to. But with us you can still get bonded easily.
To help these applicants get bonded and continue doing business, we at Bryant Surety Bonds have developed a special Bad Credit Program with our expert surety partners, providing the same excellent bonds that are available to all our clients.
Rates under our bad credit program are higher, due to the increased risk, and vary between 2.5% and 10% of the total amount. As with all other bonds, our partners always strive to offer the best possible rate to each of our applicants.
By getting bonded, applicants with lower credit score can improve their scores over time and get increasingly better rates with each renewal.
Investment Advisor Licensing
Becoming a licensed or registered investment advisor (RIA) is required in many states. On the federal level, an advisor has to become registered with the Securities and Exchange Commission (SEC) if he or she manages more than $100 in client assets. Those managing less are typically required to become licensed with the state securities agency.
To become an RIA, you will likely have to pass the Series 65 (Uniform Investment advisor Law) exam. You may have to fulfill additional requirements, as well as pay a licensing and application fee, along with submitting your investment advisor surety bond. Check with your local securities agency concerning the particular licensing requirements.
How to Get Your Investment Advisor Surety Bond
Fill in our online surety bond application to get started with the bond application process. We’ll provide you with a free bond quote, and will send you your bond via post within a few days of your application and payment.
Call us at (866)-450-3412 if you have any questions regarding the cost of your bond or the bonding requirements. Our bond experts will be happy to help you out!