Colorado Broker-Dealer or Investment Adviser Bond Overview
- Purpose: To ensure financial professionals act honestly and ethically
- Who Needs It: Certain mortgage broker-dealers and investment advisers in Colorado
- Regulating Body: The Colorado Division of Securities
- Bond Amount: $10,000–$50,000, based on net worth deficiency
- Minimum Price: $150, or 1.5% of the bond amount
What Is a Colorado Broker-Dealer or Investment Adviser Bond?
This surety bond ensures that Colorado mortgage broker-dealers and investment advisers (IAs) follow state laws and properly handle client funds.
To get a license, you’ll need to file proof of financial security with the Colorado Division of Securities. A broker-dealer or investment adviser bond is often used to meet this requirement.
Bond Coverage Requirements
Not all broker-dealers and investment advisers need a surety bond. You only need to file one if you don’t meet the net worth requirements.
Mortgage Broker-Dealers
Mortgage broker-dealers only focus on investments tied to real estate. If you hold or control investment funds, you must meet one of the following financial security requirements:
- $25,000 net liquid assets
- $1,000,000 net worth
- $50,000 surety bond
You may be exempt if you place client funds in a dedicated escrow account within 48 hours under strict protections.
Investment Advisers
If you’re an investment adviser in Colorado, you need to maintain a certain liquid net worth depending on your authority over client funds:
- Discretionary authority: You can buy and sell stocks in the account without client approval
- Custody: You have direct access to hold, withdraw or transfer client funds
| Type of Authority | Net Worth Required |
|---|---|
| Discretionary authority | $10,000 |
| Custody | $35,000 |
You can purchase a surety bond to cover any deficiencies, rounded up to the nearest $5,000. For example, if you are short $6,000, you would need to file a $10,000 bond.
Note: If you’re an IA primarily located out of state but doing business in Colorado, you only need to meet your home state’s license and bond requirements.
How Much Do Broker-Dealer or Investment Adviser Bonds Cost in Colorado?
Your exact rate will vary based on your coverage amount and credit score:
- Investment adviser bonds start at $150 for the minimum $10,000 coverage
- Broker-dealer bonds start at $750 for $50,000 coverage.
Apply for a free quote today!
SuretyBonds.com offers the lowest available rates from our nationwide provider network with no added fees.
How Does a Colorado Broker-Dealer or IA Bond Work?
A Colorado broker-dealer or investment adviser bond creates a legally binding contract between these three parties.
| Bond Party | Description |
|---|---|
| Principal | The mortgage broker-dealer or investment adviser purchasing the bond |
| Obligee | The Colorado Division of Securities requiring the bond |
| Surety | The issuing surety provider |
This bond is your financial guarantee to the Division that you’ll uphold the Colorado Securities Act. This includes:
- Making compliant investment decisions
- Avoiding fraud
- Following recordkeeping requirements
If you violate these terms, affected parties can file claims against your bond. The surety will validate and pay claims up to your full bond amount. It’s then your responsibility to refund the surety.
How Do I Get a Mortgage Broker-Dealer Bond in Colorado?
You can apply for your bond in minutes on this page. Just follow these steps:
- Fill out the quote request form
- Provide any financial information if requested
- Check out through our secure payment portal
- Sign and file the digital bond form with the Division of Securities
Then, you’ll be officially bonded and can apply for your Colorado broker-dealer or investment adviser license.
How Fast Can I Get My Bond?
After you apply, we’ll send you a free quote within one business day or less. Once you’re ready, you can checkout and receive the digital form immediately by email.
How Do I Renew My Bond?
Colorado investment adviser bonds expire annually. We’ll send you reminders starting 90 days before renewal. Simply pay the attached invoice to extend your bond for another year.
How Do I Update My Bond Information?
You can request to update your bond form by contacting your surety company. Just email [email protected] with the new information, and we’ll issue a bond rider if possible.
How to Get a Broker-Dealer or Investment Adviser License in Colorado
The Colorado Division of Securities oversees the licensing of state financial professionals. Your application process will depend on your license type.
Mortgage Broker-Dealer Licensing
To open a mortgage broker-dealer firm, follow these steps:
- Complete Form BD for the firm
- Fill out Form U-4 for each mortgage sales representative and provide proof that they’ve passed the required exams
- Pay all applicable licensing fees
- Submit a Consent of Service of Process Form
Mail all materials to this address:
Attn: Annastasia Valencia
Colorado Division of Securities
1560 Broadway, Suite 900
Denver, CO 80202
You will need to renew your license annually. A Division representative will send you an invoice for the annual fees at the end of the calendar year.
Investment Adviser Licensing
You must first apply for a firm license by following these steps:
- Ensure you meet the financial requirements and purchase a surety bond to cover any deficiencies
- Submit the IARD Entitlement Form through FINRA
- File Form ADV and pay the license fees through your IARD account
- Email a sample of your client contracts to the current IA review staff
Your employees will need to apply individually as investment adviser representatives (IARs), which includes passing an exam. You only need to meet the liquid net worth requirement for the firm as a whole, not each IAR.
You can renew your license and pay any fees through your IARD account. IARs must meet continuing education requirements.
