Investment adviser bond cost
The Kentucky Department of Financial Institutions requires investment advisers to post surety bonds before becoming legally licensed. The amount of coverage needed depends on the type of authority the adviser has over client funds/securities. Advisers who have discretionary authority but do not have custody must post a $10,000 bond. Advisers who have custody must post a bond up to $25,000.
Pricing is subject to underwriting consideration, which means your premium is based on a review of your personal credit report. Request a free financial adviser quote now to find out your exact premium!
Why this bond
Kentucky investment adviser surety bonds ensure that principals (advisers) adhere to the provisions of Kentucky Revised Statutes Chapter 292, which is also known as the Kentucky Securities Act. Prohibited acts under this bond include, but are not limited to:
- making untrue statements
- entering into or renewing an investment contract without providing it in writing
- assigning a part of an investment contract without the consent of the other parties
- employing any scheme, artifice or device to defraud
- engaging in any practice or act that classifies as fraudulent
If the principal violates these terms, the bond protects harmed parties from financial loss up to the full bond amount. Any claim paid out by the surety must be reimbursed by the principal.
Investment adviser bond details
Kentucky investment adviser bonds are effective for 1 year from the execution date unless canceled or violated. The surety can cancel the bond by giving 30 days’ written notice of cancellation to both the principal and the Commissioner of the Department of Financial Institutions.All Kentucky bonds are subject to a 1.8% state surcharge.
Become an investment adviser
To become legally licensed as an investment adviser in Kentucky, applicants must submit the following materials:
- Uniform Form ADV Parts 1 and 2
- $100 filing fee
- copy of client advisory contract
- surety bond in the proper amount
- current financial statement
Apply for your surety bond
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