I was wondering if someone could explain any limitations there may be in only having a series 65 when operating as an IAR. I understand that the 7 is required in order to run a commission based business, but what about directly managing client's accounts? I am a bit confused as to what exactly you can do with a 65 beyond "advising" and what that really entails. Can you be in direct control of the client's portfolio or do you require client authorization before placing every trade? I am in the beginning stages of research for a possible addition to a cpa practice for some background, so please bare with me. I have attempted to research this specific question, but can't really find what I'm looking for.
Thanks in advance.
Yes, you can direct client trades. They sign a limited POA to give you trading auth. Requirements differ by state, but a 65 MAY be all you need as an IAR of an RIA. Go to any of the major custodians (Schwab, TDA, Trade-PMR, Fidelity). Their websites have plenty of info. If you are starting from scratch, Trade-PMR may be the best place to start. They cater to startups, their technology is great, and their fees are pretty modest (for what you get). Although their ticket charges seem a bit higher than average.
I am doing pretty much the same thing, except I am expanding someone else's Tax practice with advisory services. In nearly every state the only limitation with the Series 65 is fee-based business, and the only real drawback to that these days is it takes you out of insurance products, including annuities, which are newly popular due to everyone's risk aversion. Having discretionary authority will subject you to more compliance and audit costs, but as a CPA you should be well-prepared for that. You should note that you will almost certainly need to set up the RIA as a separate entity from your accounting practice.