Kentucky Investment Adviser Bond Overview
- Purpose: To protect clients from fraudulent or negligent advising practices
- Who Needs It: Kentucky investment advisers who don’t meet the net worth requirements
- Regulating Body: The Kentucky Department of Financial Institutions — Securities Division
- Bond Amount: $10,000–$100,000, based on authority or custody over client funds
- Minimum Price: $100 for a one-year term, credit-based
What Is a Kentucky Investment Adviser Bond?
A Kentucky investment adviser bond protects your clients by ensuring that you comply with state law. You may need a surety bond to register with the Kentucky Department of Financial Institutions (DFI).
Bond Coverage Requirements for Kentucky Investment Advisers
Not every Kentucky investment adviser needs a surety bond. You can file a surety bond to cover part or all of the net worth requirement for registration.
Your bond amount will depend on what type of authority you have over client funds:
- Discretionary authority: You can buy and sell stocks in the account without client approval
- Custody: You can access and transfer client funds
| Type of Authority | Bond Amount |
|---|---|
| Discretionary authority over funds totaling ≤$25 million | $10,000 |
| Custody of funds totaling ≤$25 million | $25,000 |
| Discretionary authority over or custody of funds totaling more than $25 million | $25,000–$100,000 |
If you have both discretionary authority and custody of client funds or securities, the custody-based net worth and bonding requirements generally apply.
How Much Do Investment Adviser Bonds Cost in Kentucky?
Kentucky investment adviser bonds start at just $100 for the minimum $10,000 coverage. We’ll run a soft credit check to determine your exact premium rate. Apply for a free quote below!
SuretyBonds.com offers the lowest available rates from our nationwide provider network with no added fees.
How Does a Kentucky Investment Adviser Bond Work?
Like all surety bonds, a Kentucky investment adviser bond is a legal contract binding three parties.
| Bond Party | Description |
|---|---|
| Principal | The investment adviser purchasing the bond |
| Obligee | The Kentucky Department of Financial Institutions requiring the bond |
| Surety | The issuing surety provider |
By filing this bond, you promise to uphold the Kentucky Securities Act. The following acts are prohibited:
- Misrepresenting facts when advising clients
- Engaging in fraud or deceit
- Misusing client funds or securities
- Failing to disclose conflicts of interest
- Charging unauthorized fees
If you violate these terms, harmed parties can file claims against your bond. The surety will pay valid claims up to your full bond amount. However, you’ll need to reimburse the surety.
How Do I Get an Investment Adviser Bond in Kentucky?
You can apply for your Kentucky investment adviser bond right on this page! The bonding process is simple:
- Complete the quote request form
- Undergo a soft credit check to receive your personalized rate
- Pay the premium online or over the phone
- Get your bond delivered by email right after purchase
Once you have the digital bond form, be sure to file it with the DFI.
How Fast Can I Get My Bond?
We issue free bond quotes within one business day! Apply online today to get started.
How Do I Renew My Bond?
Kentucky investment adviser bonds expire annually. If you bought your bond from us, we’ll send you reminders starting 90 days before renewal.
Once you pay the attached invoice, we’ll issue a continuation certificate to extend your bond for another term. You’ll need to file this form with the DFI.
Can I Make Changes to My Bond?
Your surety company can update your bond form by issuing a bond rider. Simply email the new information to [email protected], and we’ll take care of any changes.
How to Become an Investment Adviser in Kentucky
You must register with the Department of Financial Institutions if you meet any of the following criteria:
- You have a physical office in Kentucky
- You have investment adviser representatives located in Kentucky
- You have more than 5 clients in Kentucky (even if you’re located in another state)
To register, file the following materials online through IARD:
- Forms ADV Part 1 and 2
- $100 filing fee
- Your client advisory contract(s)
- Proof of financial solvency
- Current balance sheet
- Proof that you meet the minimum net worth requirements
- A surety bond, if necessary
You must renew your registration annually through IARD.
What Does My Client Contract Need to Include?
All client contracts must include the following information:
- What services you provide
- How long the agreement will last
- How the fee is calculated
- Whether any prepaid fees will be refunded if the contract ends early or services aren’t completed
- Whether you can make investment decisions without asking first, and what limits apply
- Whether you can access or hold client money, and how that access is handled
- A statement that you cannot transfer the contract to someone else without the client’s written permission
If your contract is missing any of these disclosures, your application will be denied.
