Alabama Investment Adviser Bond Overview
- Purpose: To hold investment advisers and broker-dealers financially liable for following Alabama Code
- Who Needs It: Registered investment adviser and broker-dealer firms in Alabama
- Regulating Body: The Alabama Securities Commission — Registration Division
- Bond Amount: $50,000
- Minimum Price: $500 for a one-year term; credit-based
What Is an Alabama Investment Adviser or Broker Dealer Bond?
Alabama investment adviser and broker-dealer bonds hold financial professionals responsible for conducting business lawfully. Being bonded ensures compliance with Alabama Code and protects clients from fraud or theft.
Who Needs an Investment Adviser Bond?
The Alabama Securities Commission — Registration Division requires all investment advisers to have either a $50,000 surety bond or $10,000 net capital as financial security if they:
- Maintain custody of client funds or securities, or
- Have discretionary authority over customer accounts
Securities brokers/dealers may also need this surety bond. Confirm your bond requirement with the Securities Commission.
Individual agents or representatives do not need a surety bond. The firm or business entity must file the bond upon registration.
Investment Advisers vs Broker-Dealers
Investment advisers and broker-dealers require different registrations, however, both typically need a surety bond to operate.
Learn more about investment adviser and broker-dealer roles and duties in the Working with Financial Professionals resource.
How Much Do Investment Adviser Bonds Cost in Alabama?
The cost of an Alabama investment adviser and broker-dealer bond depends on credit score, industry experience and sometimes other financial factors. With great credit, most applicants pay $500 for a one-year term.
You can also save up to 25% by selecting a multi-year term. Apply for a free quote today!
SuretyBonds.com offers the lowest available rates from our nationwide provider network with no added fees.
How Does an Alabama Investment Adviser/Broker-Dealer Bond Work?
When you buy an investment adviser bond, you enter a three-party agreement.
| Bond Party | Description |
|---|---|
| 1. Principal | You, the adviser or broker-dealer |
| 2. Obligee | The Alabama Securities Commission |
| 3. Surety | The issuing surety provider |
If you break contract terms, the surety will pay out valid claims and you are expected to reimburse the surety later on.
How to Get Your Investment Adviser or Broker Bond
You can get an investment adviser and broker-dealer bond within one business day. Just follow these quick steps today:
- Apply for a quote online
- Get a quote within one business day
- Pay the premium
- Receive your bond via email
- File your bond form
How Do I File My Bond?
While your bond form will be delivered to you digitally, you need to file your bond by mailing it to the following address:
Alabama Securities Commission
Licensing Division
PO Box 304700
Montgomery, AL 36130-4700
Can I Get Bonded With Bad Credit?
We approve 99% of applicants. However, if you’re concerned about qualifying, read about our Bad Credit and Premium Financing options.
How Do I Renew My Bond?
Investment adviser/broker-dealer bonds expire annually and can be renewed online or over the phone.
You’ll receive periodic renewal reminders starting 90 days before the expiration date. Just follow the instructions to pay the invoice and renew your bond.
How Do I Update My Bond Information?
If you need to update information on your bond, contact our Customer Care team:
- [email protected]
- 1(800)308-4358
We’ll issue a bond rider for simple fixes like name and address. Larger updates may require a new bond form.
How to Become a Registered Investment Adviser in Alabama
Register as an investment adviser in Alabama through the Investment Adviser Registration Depository (IARD). Complete the following steps to get your license:
- Pay the $200 IARD electronic filing fee
- Complete the application Form ADV
- Submit copies of client agreement forms
- Provide an oath by duly authorized officer attached to a balance sheet
- Provide a custody and/or discretionary authority statement
- Get a $50,000 surety bond; if applicable
- Provide copies of client brochure; if applicable
- Provide an undertaking/affidavit with the number and type of clients; if applicable
- Submit Forms U-4 through the IARD System for all representatives*
- Provide a list of all representatives who will be conducting business in Alabama
Refer to the Essential Investment Adviser Information PDF and Securities Commission Application Requirements for Investment Advisers for more details on registration and requirements. If you are applying as an out-of-state corporation, there are additional affidavit and certificate requirements.
*Note: Representative registration differs and has a $70 filing fee. Check the Filing Guidelines for Investment Adviser Representative Registration for more information.
How to Become a Registered Broker-Dealer in Alabama
Broker-dealer registration is done through FINRA Central Registration Depository (Web CRD) system. To complete your registration, do the following:
- Complete the application Form BD
- Pay the $250 filing fee
- Get a $50,000 surety bond; if applicable
- Provide a custody of Alabama customer funds and/or discretionary accounts statement from the firm
- Provide a statement detailing offers and/or sales prior to applying
- Provide a list of all agents conducting business in Alabama
Refer to the Application Requirements for Registration as a Securities Broker/Dealer for more details.
