What Is an Investment Advisor Representative?

An investment advisor representative helps advisory firms offer financial advice to investors. If you’re looking for assistance with your investments, you may consider working with an investment advisor. Such an advisor may assign a representative to work with you directly. Here are the services investment advisor representatives offer and their fee structure.

Consider working with a financial advisor for access to key insights and guidance from a professional.

What Is an Investment Advisor Representative?

An investment advisor representative (IAR) advises clients on behalf of a registered investment advisor or RIA. A registered investment advisor is an investment firm that’s registered with the Securities and Exchange Commission (SEC). These firms adhere to guidelines established by the Investment Advisers Act of 1940.

An RIA is different from a broker-dealer, a company that buys or sells investments on behalf of clients. These organizations are regulated by the Securities and Exchange Act of 1934. Additionally, an RIA is a fiduciary while a broker-dealer is not. Having fiduciary status means that an RIA — and those who work for them — are obligated to act in their client’s best interests.

What Does an IAR Do?

An investment advisor representative typically helps clients build and manage investment portfolios to reach their financial goals.

Typically, an investment advisor representative helps clients build investment portfolios. Also, they design portfolios that help clients reach financial goals. An investment advisor representative’s main tasks include:

Offering advice about different securities: IARs research and compare investments for their clients. As fiduciaries, they make recommendations with the client’s interests in mind.
Overseeing investment accounts: An investment advisor representative may also handle the day-to-day management of client accounts. That includes properly funding trades and handling any administrative issues that arise.
Advising clients on investment strategy: An IAR can provide advice about specific securities. However, an IAR can also offer more general investment advice to clients. The advice offered depends on the licenses or certifications an IAR holds.

An investment advisor representative may also supervise employees doing any of the above tasks at a registered investment advisory firm.

IARs vs. Financial Advisors

Investment advisor representatives are a specific type of financial advisor. While both may offer financial guidance, their services, fiduciary responsibilities, and compensation structures can differ. The term “financial advisor” is broad and can describe professionals who provide general financial planning or investment advice.

An investment advisor representative, by contrast, focuses primarily on securities such as stocks, bonds, mutual funds, and other investment products. IARs are registered with the SEC or state regulators and are held to a fiduciary standard, meaning they must act in their clients’ best interests when providing investment advice.

Other types of financial advisors, such as brokers or insurance agents, may follow the suitability standard instead. This means their recommendations must be appropriate for the client but not necessarily the best possible option.

Education, licensing, and compensation structures can also vary. IARs typically meet specific registration requirements and are often fee-based, while other financial professionals may earn commissions or use hybrid compensation models.

How an IAR Makes Money

Investment advisor representatives can be fee-only. A fee-only advisor only earns money through the fees their clients pay. Fees can be assessed as a percentage of assets under management. However, advisors may charge an hourly fee or a flat fee for specific services. Their typical fee range is 1% to 2% of assets under management.

A fee-based investment advisor also makes money in other ways. Specifically, they earn commissions for recommending certain investment products or trading certain investments in your portfolio. However, their recommendations must fit within the fiduciary standard. Paying higher fees trades away more of your investment earnings for professional financial advice.

Investment Advisor Representative Certifications

Prospective investment advisor representatives (IARs) must register with a registered investment advisor (RIA) firm. The RIA is responsible for updating its Form ADV Part 2B through the Investment Adviser Registration Depository (IARD) system to include the new IAR. This filing discloses the advisor’s background, qualifications, and potential conflicts of interest.

Form ADV Part 2B is a public document that outlines the advisor’s services, compensation, and any past or ongoing legal or disciplinary actions. In addition, advisors must register with either the SEC or the state securities authorities in the states where they conduct business.

An investment advisor representative must pass the Series 65 exam, a comprehensive exam administered by the Financial Industry Regulatory Authority (FINRA). Alternatively, an advisor may become an IAR by passing the Series 66 and the Series 7 exams. When registering at the state level, advisors must submit Form U4 showing that they’ve successfully passed their exams.

Depending on the state, advisors may be able to sidestep these exams if they hold other professional credentials. For example, they may be able to opt out of taking the exams if they already hold a Certified Financial Planner™ (CFP®) or chartered financial analyst (CFA) designation.

Legal and Regulatory Oversight of Investment Advisor Representatives

Investment advisor representatives (IARs) operate under both federal and state regulatory oversight. Registered investment advisor (RIA) firms managing more than $100 million in assets must register with the Securities and Exchange Commission (SEC), while those managing less typically register with state securities regulators. As part of registration, RIAs must file Form ADV, which provides details on their services, fees, potential conflicts of interest, and any disciplinary history.

At the individual level, IARs file Form U4 when registering. This form documents exam completion, personal background information, and any disciplinary events. Ongoing compliance requirements include maintaining licenses, ensuring that IARs stay informed on regulatory rules and financial markets.

The fiduciary standard is central to IAR regulation. Unlike broker-dealers, who are generally held to the suitability standard, IARs must always act in their clients’ best financial interests. Regulators can investigate complaints, conduct audits, and impose penalties when advisors fail to meet these obligations.

This regulatory framework gives investors more transparency and accountability when working with IARs. Understanding how oversight differs between IARs, broker-dealers, and financial advisors can help clients make more informed choices.

Comparison of Oversight and Standards

Feature	Investment Advisor Representative (IAR)	Broker-Dealer	General Financial Advisor*
Primary Regulator	SEC (for RIAs > $100M AUM) or State SEC	FINRA & SEC	Varies (may not be regulated)
Standard of Care	Fiduciary – must act in client’s best interest	Suitability – recommendations must be “suitable”	Depends on role and designation
Registration Documents	Form ADV (firm), Form U4 (individual)	Form BD, Form U4	May not require SEC/FINRA filings
Typical Services	Investment management, portfolio strategy	Buying and selling securities, transaction services	Broader advice (may include insurance, budgeting, planning)
Compensation	Fee-only or fee-based (AUM, hourly, flat fee)	Commissions and transaction-based fees	Fee, commission, or mix depending on licensing

* “General financial advisor” is a broad term and may describe professionals without SEC/FINRA registration who instead hold other designations or none at all (e.g., CFP®, CPA).

Bottom Line

If you want investment advice, an IAR may fit your needs, but for broader help with finances, choose an advisor who offers full planning services.

Whether an IAR is the appropriate financial professional to manage your investments depends largely on your goals and what you’re comfortable paying in fees. If you specifically need investment advice, an investment advisor representative may help. On the other hand, if you want an advisor who can speak to things beyond investing, such as debt management, budgeting, retirement planning or estate planning, be sure to work with an advisor that offers financial planning

When vetting investment advisor representatives, ask about their fees and pay structure. Take time to review their public disclosures and also use FINRA’s BrokerCheck tool to see what other financial designations they might hold and what type of advice they’re qualified to offer. This can help you decide whether an investment advisor representative is what you need to manage your portfolio.

Investment Tips

A financial advisor may be able to shed more light on what it is an IAR does and what type of investor they’re suitable for. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
Aside from discussing fees with an investment advisor representative, it’s also helpful to ask about their overall investment strategy as well as how they prefer to communicate with clients. Ideally, you should be working with an advisor who has experience working with clients who have a financial situation that’s similar to yours and who will be responsive when you have questions or want to make changes to your account.