Series 65: Paying Solicitors For Advisory Business

Paying Solicitors for Advisory Business

A registered investment adviser may not make cash payments to a third-party for soliciting clients, unless all of the following conditions are met.

• • The solicitor has not been subject to any outstanding orders from the SEC barring his activity.
• • The solicitor has not been convicted of a securities related felony or misdemeanor within the past ten years.
• • The solicitor has not willfully violated federal securities law.
• • The solicitor has not been barred from acting as a securities professional by a court.
• • The arrangement between the investment adviser and the solicitor is in writing. If the solicitor plans on soliciting more than just impersonal advisory services, the written document must describe the activities that the solicitor will engage in.
• • The client must be provided with the investment adviser’s brochure (Form ADV, Part 2) and a separate solicitor