Pennsylvania Investment Adviser and Broker-Dealer Bond Guide
In Pennsylvania, some investment advisors and broker-dealers need to file a surety bond to register with the Department of Banking and Securities.
Bond Overview
- Purpose: To ensure investment advisors and broker-dealers uphold state regulations
- Who Needs It: Most investment advisors and broker-dealers in Pennsylvania
- Regulating Body: The Pennsylvania Department of Banking and Securities, Securities Licensing Office
- Required Amount: $1,000–$100,000
- Premium Rates: Credit-based, starting at 1%
Keep scrolling to learn more about the bonding process.
What Is a Pennsylvania Investment Adviser or Broker-Dealer Bond?
This type of license and permit surety bond holds Pennsylvania investment advisors and broker-dealers responsible for complying with state laws and handling client funds properly.
How Much Bond Coverage Do I Need?
Under Pennsylvania Code § 303.042, investment advisers must maintain a specific minimum net worth based on their practice:
- Custody of client funds: $35,000
- Discretion (but no custody): $10,000
If you do not meet the net worth requirements, the Department requires a surety bond to cover the deficiency, rounded up to the nearest $5,000.
Similarly, PA Code § 303.041 requires all broker-dealers to maintain a minimum net worth of $25,000. Any broker-dealers not federally registered with the SEC must file a surety bond that covers the net capital deficiency, rounded up to the nearest $5,000.
How Much Do Investment Adviser and Broker-Dealer Bonds Cost in Pennsylvania?
Pennsylvania investment advisor and broker-dealer bond premiums typically cost 1-2% of the total bond amount, based on credit score.
For example, with excellent credit, you could pay just $150 for $10,000 in coverage. Select your bond amount below to get a free, personalized quote.
SuretyBonds.com offers the lowest available rates from our nationwide provider network with no added fees.
How Does a Pennsylvania Investment Adviser or Broker-Dealer Bond Work?
A Pennsylvania investment advisor bond or broker-dealer bond is a legal contract between three parties:
- Principal: The investment adviser or broker-dealer purchasing the bond
- Obligee: The Pennsylvania Department of Banking and Securities requiring the bond
- Surety: The provider issuing the bond
Under this contract, you, as the principal, promise to uphold the Pennsylvania Securities Act of 1972.
If you break these terms, harmed parties can file claims. The surety will validate and pay claims up to the full bond amount. However, you are ultimately responsible for refunding the surety.
How Do I Get a Broker-Dealer or Investment Adviser Bond in Pennsylvania?
SuretyBonds.com provides the fastest and easiest way to get an investment adviser or broker-dealer surety bond. Follow these simple steps:
- Apply Online: Enter your information to receive a personalized quote
- Pay Invoice: Complete your purchase online or over the phone
- Receive Bond: Receive your official bond form via email
Upon receipt, sign and file the official bond documentation with the Department.
How Fast Can I Get My Bond?
SuretyBonds.com issues investment advisor and broker-dealer bonds faster than any other provider. We process most bond applications same-day. Apply now to receive your free quote.
Can I Get Bonded With Bad Credit?
Yes, you may still be able to get bonded with bad credit. However, poor credit will typically increase your premium rate.
Apply for a free quote or visit our Surety Bond Cost FAQ page to see how credit may impact your cost.
How Do I Renew My Investment Adviser and Broker-Dealer Bond?
Pennsylvania investment adviser and broker-dealer bonds expire annually. We’ll send you reminders and a renewal invoice before your bond expires.
To renew your bond, just pay the premium — we’ll do the rest!
How to Become an Investment Advisor or Broker-Dealer in Pennsylvania
The Pennsylvania Department of Banking and Securities oversees the registration of all investment advisors and broker-dealers in the state. Both have a distinct application process.
PA Investment Advisor Application Process
To become an investment advisor in Pennsylvania, follow these steps:
- Register on IARD: Register for an Investment Adviser Registration Depository account by completing the “Entitlement” application.
- Activate Account: Next, you will receive an email with instructions on how to set up your IARD account.
- Purchase a Surety Bond: If you don’t meet the minimum net worth requirements, purchase a surety bond to cover the deficiency.
- Upload Supporting Documents: File the ADV Form and all required documents in your account. If you have discretionary authority or custody of client funds, also submit a Statement of Financial Condition.
- Pass an Exam: Take and pass either the Uniform Investment Adviser Law Examination (Series 65 exam) or both the Series 7 and 66 exams.
- Pay Fees: Pay the $400 filing fee.
The Department may take between 45 and 90 days to review your application. Once approved, you will be responsible for renewing your registration annually by December 31.
PA Broker-Dealer Application Process
Your broker-dealer application process will vary based on whether or not you’re registered with the Financial Industry Regulatory Authority (FINRA).
FINRA members can apply directly through the Central Registration Depository (CRD) system. If you’re not a FINRA member, follow these steps to apply:
- Apply: Submit Form BD via the DoBS online portal.
- Purchase a Surety Bond: If you’re not registered with the SEC, purchase a surety bond in the required amount.
- Pay Fees: Pay the $550 filing fee and $135 per agent fee via check.
Once approved, you will be responsible for renewing your registration annually by December 31.
