Advisor Practice Terms
Advisor practice terms cover the professional and regulatory machinery of running an advisory firm: registration and licensing, compliance obligations, industry organizations, and practice models. They’re written for consumers who want to understand how the industry works, and for advisors considering practicing differently.
For most readers this is background vocabulary: useful when a news story or disclosure document assumes it. For advisors weighing their own practice, it’s the working language of the decision, and it pairs with our advisor-facing guides.
9 terms published
- CFP Board
CFP Board, Certified Financial Planner Board of Standards, is the nonprofit organization that owns the CFP® marks in the United States, sets the education, exam, experience, and ethics requirements for CFP® certification, and disciplines certificants who violate its standards.
- Code of Ethics
A code of ethics is a formal set of conduct rules a financial firm or professional must follow. Every SEC-registered investment adviser is legally required to adopt one, and credentialing bodies like CFP Board impose their own on the professionals they certify.
- Custody Rule
The custody rule is an SEC regulation (Rule 206(4)-2 under the Investment Advisers Act of 1940) that governs how registered investment advisers must safeguard client money and securities they hold or can access.
- Garrett Planning Network
The Garrett Planning Network is a nationwide network of fee-only financial advisors, founded by Sheryl Garrett in 2000, whose members commit to making advice available on an hourly, as-needed basis with no asset minimums.
- Investment Adviser Representative (IAR)
An investment adviser representative (IAR) is an individual licensed to give investment advice on behalf of a registered investment adviser (RIA). IARs typically qualify by passing the Series 65 exam (or Series 66 plus Series 7) or by holding a credential such as the CFP® certification that most states accept instead.
- Investment Advisers Act of 1940
The Investment Advisers Act of 1940 is the federal law governing investment advisers: anyone in the business of advising others about securities for compensation. It requires registration, imposes the fiduciary duty advisers owe their clients, and is the reason "Registered Investment Adviser" means something.
- NAPFA (NAPFA)
NAPFA, the National Association of Personal Financial Advisors, is the leading U.S. professional association for fee-only financial advisors, whose members are prohibited from earning commissions and must sign a fiduciary oath.
- Registered Investment Adviser (RIA)
A Registered Investment Adviser (RIA) is a firm registered with the SEC or a state securities regulator to provide investment advice for compensation. RIAs owe clients a fiduciary duty under the Investment Advisers Act of 1940.
- XY Planning Network (XYPN)
XY Planning Network (XYPN) is a membership organization founded in 2014 that supports fee-only financial planners serving younger clients, typically Generation X and Y, often through monthly-subscription fees and with no asset minimums.
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