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 Registered Investment Advisors 

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What is a "Registered Investment Advisor"?

Registered Investment Advisors ["RIAs"] are specialists in the management of financial security portfolios. Many of the thousands of Registered Advisors supervise assets for mutual funds, pension plans, and institutional clients. The remaining RIAs are in "private practice"... providing personalized investment service to individuals, trusts, and small business clients.

Here are the facts about what it takes to become and remain a Registered Investment Advisor and the roles that regulatory agencies perform for RIA clients...

U. S. Government registration of Advisors began with the 1940 Investment Advisors Act. Today, Advisor regulations are one of the most fully developed codes for financial practitioners in the world.
Starting in 2012, Federal Advisor registration by the U.S. Securities and Exchange Commission ["SEC"] is limited to firms with assets of about $100 million or more under "continuous and regular" management. The majority of RIA firms, however, supervise less than this amount and are regulated by State Security Administrators. 
State and Federal registration requires disclosure on Form ADV of an Advisor’s... investment analysis methods, types of investments used, number of clients, services offered, compensation methods, account management methods, key employee education and work histories, disciplinary history, brokerage selection and commission policies, affiliations with external organizations, paid client referral arrangements, and potential conflicts of interest. RIA clients must be offered a copy of Form ADV, Part 2 or its equivalent annually. NEW.gif (1154 bytes) As of September 2001, you can read the full text Form ADV filing for every Registered Investment Advisor at: SEC Investor Advisor Public Disclosure Website 
Both Federal- and State-registered Advisors are subject to unannounced inspections of their operations by regulatory authorities! Inspections are typically extensive reviews against stringent record-keeping regulations, advertising restrictions, "due diligence" rules, and anti-fraud provisions. [One example of the rules RIAs live by... an Advisor cannot use testimonials from satisfied clients to market its services!]
Advisors with managed assets less than $100 million are almost always required to register with the State (or States) in which they serve clients or have a physical presence [offices; staff]. State registration typically requires passage of standardized tests; disclosure of key employee education and work histories; disclosure of business or personal legal sanctions; and financial statements. In some cases, employee fingerprinting is required.
Advisors must be registered or make "notification filings" in any State where they have an office. They must also register in most States if they have more than five clients there. Each "representative" of an RIA firm and at least one "investment principal" must be identified and qualified in State filings. ["Principal" designation typically requires testing and disclosure procedures like those listed in the preceding paragraph.]
Registration documents filed by Advisors on the IARD System are public records available to prospective clients and all citizens. Most Advisor filings are now posted on the Internet by the Financial Industry Regulatory Authority [FINRA]. In addition, the SEC and most State regulators respond to citizen inquires about the disciplinary history of any RIA in their jurisdiction.


(1) Essentially all long-lived Investment Advisors must have the knowledge and experience to attract substantial assets to their portfolio management businesses.

(2) RIA firms are subject to some of the most stringent disclosure and oversight rules in the financial services industry.

(3) More than 70 years of regulatory development has provided many safeguards for clients of Registered Investment Advisor firms.

(4) Investment Advisors are "fiduciaries" with a legal obligation to act in your best interests. This is a more stringent requirement than most stockbrokers, insurance agents and financial planners must meet.

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American Superior Company is registered as an Investment Advisor with the Securities & Exchange Commission. We will respond to inquiries about Advisory service that originate from within the United States, but not until and unless it's determined that American Superior Company and its representatives are properly registered or exempt from registration in the inquirer's domicile state. Any securities identified or investment data included at this site, or referenced through links to other Internet sites, is for general information only and should not be construed as investment advice. Whenever historical data is presented, understand that past performance does not imply or guarantee future results. Investment in financial securities can produce profits or losses. Officers, directors and employees of American Superior Company may, from time to time, have positions in, or buy and sell, securities that are identified at this site or referenced through links to other Internet sites, but there is no intention to include such securities because of such ownership, or because of such purchases and sales. Information presented at this site is taken from generally reliable sources but its accuracy and completeness are not guaranteed. American Superior Company has authorized publication of the content on this page.
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