Massachusetts Investment Adviser Bond Overview
- Purpose: To guarantee investment advisers manage client funds according to state law
- Who Needs It: Massachusetts investment advisers with discretionary authority over client funds
- Regulating Body: The Secretary of the Commonwealth — Securities Division
- Bond Amount: $10,000
- Minimum Price: $150; credit-based
What Is a Massachusetts Investment Adviser Bond?
This bond ensures Massachusetts investment advisers properly handle client funds. If you have discretionary authority over client accounts, you must file a $10,000 bond with the Secretary of the Commonwealth. This means that you make investment decisions for clients without approval.
Note: Under Massachusetts law, the state can also require a bond for broker-dealers in specific cases.
How Much Do Investment Adviser Bonds Cost?
The $10,000 Massachusetts investment adviser bond starts at $150. Qualified applicants often pay no more than 3.5% of the bond amount.
Apply now! We’ll run a soft credit check and send you a quote within one business day or less.
SuretyBonds.com offers the lowest available rates from our nationwide provider network with no added fees.
How Does the Bond Work?
A Massachusetts investment adviser surety bond creates a legal contract between three parties.
| Bond Party | Description |
|---|---|
| Principal | The investment adviser purchasing the bond |
| Obligee | The Office of the Secretary of the Commonwealth requiring the bond |
| Surety | The issuing surety provider |
By filing this bond, you promise to uphold the Massachusetts Uniform Securities Act. The following acts are prohibited:
- Stealing a client’s cash or securities
- Making unauthorized trades that cause direct damage to a client's account
- Failing to return client funds if you take advance fees and go out of business
If you cause financial damage, harmed parties can file claims against your bond. The surety will pay valid claims up to the full $10,000 bond amount. However, you’ll need to reimburse the surety.
How Do I Get an Investment Adviser Bond in Massachusetts?
With SuretyBonds.com, you can apply for a free quote 24/7! After we run a quick credit check, we’ll send your exact rate within one business day.
After you pay for your bond, you’ll receive the official form right away via email. Be sure to file it with the Secretary of the Commonwealth.
How Do I Renew My Bond?
Massachusetts investment adviser bonds expire annually. When it’s almost time to renew, we’ll send you reminders and an invoice. Just pay the premium to extend your bond for another year.
Can I Make Changes to My Bond?
You can make minor changes to your bond, such as name or address, by contacting your surety. Email [email protected], and we’ll update your form by issuing a bond rider if possible.
How to Become an Investment Adviser in Massachusetts
If you charge a fee for investment advice in Massachusetts, you’ll need to register with the Secretary of the Commonwealth. Follow the steps below:
- Purchase a $10,000 surety bond (if needed)
- File all required documents online through IARD
- Designate and register at least one investment adviser representative (IAR)
- Pay the $300 registration fee and $50 IAR fee
Investment adviser registrations expire on December 31 annually. You’ll receive reminders and renewal information via IARD. The fee is $300.
Who Is Exempt From Registering?
You are only exempt from registration if:
- You don’t have an in-state office AND
- You don’t have more than five Massachusetts clients during a 12-month period
You also aren’t required to register every employee as an IAR. If someone is an officer but doesn’t actually give investment advice, they just need to file an affidavit confirming that they’re not acting as an IAR.
