FINRA Form U4: What It Is and What to Avoid

When you start an RIA, you’ll have to complete some extensive, but necessary, paperwork, starting with Form ADV. Form U4, the Uniform Application for Securities Industry Registration or Transfer, is also required for all investment advisor representatives (IARs) of the firm. While form doesn’t require the same annual updates as Form ADV, it’s important to ensure that your information is kept up to date.

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What Is a Form U4?

Form U4 is a required document for representatives of broker-dealers, investment advisers and issuers of securities. This form, which is filed electronically with FINRA, establishes registration for those individuals.

In short, Form U4 is an information tool.

FINRA and other regulatory bodies use Form U4 to collect details about an IAR or registered representative’s employment history, disciplinary history and background. That’s similar to how Form ADV documents an RIA’s assets, clients and service offerings.

Information from Form U4 is used to create individual records for IARs and registered representatives, which are stored in the Central Registration Depository (CRD). Some of the data included in Form U4 is also made available for public viewing through the FINRA Broker Check tool.

What’s Included in Form U4?

Form U4 is broken into 15 sections, which are followed by a series of disclosure forms. Only certain sections are required for IARs. The ones that must be completed include:

• Section 1. This section covers general information about an IAR, including their name, CRD number, Social Security number and employment details.
• Section 2. Here, IARs must indicate whether they’re applying for registration in a jurisdiction that requires a fingerprint card filing for identification.
• Section 3. This section collects information on IARs with dual registration. Specifically, it applies to individuals who file Form U4 and are also registered with an unaffiliated broker-dealer or another unaffiliated advisor.
• Section 5. Section 5 indicates when an IAR must be registered in specific U.S. states or territories.
• Section 6. Section 6 asks about registration with affiliated firms that are also owned or controlled by the filing firm.
• Section 8. Here, IARs must indicate any professional designations they hold from this list: Certified Financial Planner™ (CFP®), Chartered Financial Consultant (ChFC), Personal Financial Specialist (PFS), Chartered Financial Analyst (CFA) and Chartered Investment Counselor (CIC).
• Section 9. More detailed information about an IAR is required here, including their full legal name, birth date and birthplace.
• Section 10. Legal name changes and aliases are listed here.
• Section 11. FINRA requires details about an IAR’s residential history for the previous five years.
• Section 12. This section gathers information about an IAR’s current employment status as well as previous employment history for the past 10 years.
• Section 13. Other business activities that are separate from activities related to employment with an IAR’s filing firm are reported here.
• Section 14. Here, IARs must disclose legal and disciplinary events, including criminal or civil cases they are or have been involved in, regulatory actions taken against them and formal complaints filed against them.
• Section 15. Section 15 is where all required signatures are entered before submitting Form U4.

Completing Form U4 may take a few hours or a few days, depending on how organized you are beforehand. You’ll submit your form electronically through the CRD, which is part of the FINRA Gateway.

Once Form U4 is submitted and processed by FINRA, you don’t need to refile it annually. However, FINRA requires an amendment to Form U4 when there’s a material change involving your:

• Residence or place of business
• Employment status
• Jurisdiction
• Other business activities
• Disclosures regarding criminal, civil or disciplinary actions

Failing to report any material changes could result in fines, sanctions or the loss of your registration status. Generally, you must file any amendments to Form U4 with FINRA within 30 days of the date the material change occurred. You can submit amendments through the FINRA Gateway.

Tips for Completing Form U4 (and What to Avoid)

Form U4 is lengthy, covering a lot of information. If you’re disorganized or are trying to rush through it, you could leave yourself open to errors. That could delay the processing of your form.

Here are some do’s and don’ts to help make your filing smoother:

• Do organize your documents. Gathering the required information you’ll need to complete Form U4 beforehand can help you avoid a situation where you’re scrambling to track down key details.
• Do verify that your contact and personal information is correct. While a transposed digit in a phone number or an incorrectly spelled email address might seem like minor things, they can turn into major headaches when submitting your form.
• Do understand which sections apply to you. Earlier, we ran through the sections that IARs must complete, but the requirements are different for registered representatives of broker-dealers. Knowing which sections you must fill out — and which ones you can skip — can save time and ensure that you submit a complete filing.
• Don’t guess. Tracking five years of residential history or 10 years of employment history can get a bit hazy if you haven’t kept detailed records. But don’t guess at dates or other details, as that could lead to additional requests for information that can add to your processing time.
• Don’t leave any required questions blank. Leaving questions blank if you don’t know the answers is just as problematic as providing incorrect information. Again, proper preparation can help you avoid a situation where you don’t have all the details you need to finish your form.
• Don’t assume Form U4 is a one-time thing. Since Form U4 doesn’t require an annual updated filing, it’s easy to file it and forget it. But that’s perhaps the biggest mistake you can make, since failing to update your form when you have a material change to your information can have negative consequences.

Frequently Asked Questions (FAQs)

What Is Form U4 For?

Form U4 is a required filing form for representatives of broker-dealers, investment advisers and securities issuers. When starting a new RIA, Form U4 is typically filed alongside Form ADV. Unlike Form ADV, Form U4 doesn’t require annual updates, but it does require amendments when a registrant has a material change to their information.

How Long Does Form U4 Take to Process?

FINRA works to process Form U4 submissions promptly, which may take 15 to 30 days. Processing can take longer, however, if a registered representative or IAR submits an incomplete form or their form has errors that require additional clarification.

What’s the Difference Between Form U4 and Form U5?

Form U4 collects information about investment advisor representatives and registered representatives who are employed by RIAs and broker-dealers, respectively. Form U5 is used to terminate registration and, if relevant, share details with FINRA about why an individual leaves an advisory firm.

Bottom Line

Form U4 is required if you’re an IAR or registered representative of a broker-dealer. If you plan to go independent and launch an RIA from scratch, it’s important to understand when this form is required, alongside Form ADV.

Tips for Growing Your Advisory Business

• One of the biggest challenges of starting a new RIA is growing your book of business. Developing a marketing strategy starts with understanding who your ideal client is and how they spend their time online. If you need help getting more eyes on your business, you may consider partnering with an advisor marketing platform. SmartAsset AMP (Advisor Marketing Platform) is a holistic marketing service financial advisors can use for client lead generation and automated marketing. Sign up for a free demo to explore how SmartAsset AMP can help you expand your practice’s marketing operation. Get started today.
• RIA registration is a time-consuming process, and it’s important to check all the boxes to ensure your firm can operate in full compliance with regulatory guidelines. It may be worthwhile to meet with an RIA consultant if you have questions about which forms you need to file and what information you need to provide to get your firm up and running.

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