Assessment Aimed at Identifying, Addressing Potential Risks to Investors

2023 Investment Adviser Written Examination (AIA Exam)

NEWARK –Attorney General Matthew J. Platkin and the Bureau of Securities (“the Bureau”) within the Division of Consumer Affairs today announced the release of the Bureau’s Annual Investment Adviser Examination.

The Bureau, which regulates New Jersey’s securities industry, uses the examination as a risk assessment tool for the almost 900 registered investment adviser firms that manage hundreds of thousands of clients’ investment accounts in the State.

“Hard working people sometimes trust their entire life’s savings with investment advisers as they look to build their wealth and create a better future for their families,” said Attorney General Platkin. “This examination helps the Bureau identify and address problematic business practices before investors are harmed.”

Firms are required to provide responses to questions about their business activities, including portfolio composition, compliance with regulatory requirements, and customer complaints. The questions are updated each year to reflect changes in the investment adviser industry and the Bureau’s examination priorities, including the proliferation of digital assets as well as the ongoing protection of elderly investors.

“This annual examination is a key tool that we use to protect New Jersey investors and their money,” said Acting Consumer Affairs Director Cari Fais. “It allows the Bureau to assess how investment advisers are operating to ensure they’re complying with securities laws and regulations, especially when it comes to emerging markets and those involving particularly vulnerable investors.”

In addition to assessing firms’ compliance with state laws pertaining specifically to the sale of securities, the examination also assesses their compliance with other laws that affect the industry, such as the NJ Safeguarding Against Financial Exploitation Act (SAFE Act). The SAFE Act requires financial professionals, including state registered investment advisers, to promptly notify the Bureau of Securities and county adult protective services if they reasonably believe that a senior or vulnerable investor is being financially exploited. The examination also assesses compliance with Bureau policies and procedures, including a requirement that every firm, regardless of its size, create and maintain a written Business Continuity Plan to respond to an emergency or significant business disruption.

The information collected in the annual examination allows the Bureau to create risk profiles, provide guidance, and when necessary, ramp up oversight.

“The Bureau believes that investor protection begins with prevention. Our Annual Investment Adviser Examination is a way for us to identify and put a stop to practices that expose clients to unnecessary risks,” said Acting Bureau Chief Amy Kopleton. “By working with firms to ensure they’re complying with securities laws and operating in alignment with industry best practices, we are proactively protecting investors and the integrity of New Jersey’s financial services market.”

The investment adviser examination can be accessed on the Bureau’s website at www.NJSecurities.gov beginning June 13 and must be completed no later than July 13, 2023.

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The Bureau is charged with protecting investors from investment fraud and regulating the securities industry in New Jersey. It is critical that investors “Check Before You Invest.”  Investors can obtain information, including the registration status and disciplinary history, of any financial professional doing business in or from New Jersey, by contacting the Bureau toll-free within New Jersey at 1-866-I-INVEST (1-866-446-8378) or from outside New Jersey at 973-504-3600, or by visiting the Bureau’s website (http://www.njsecurites.gov/). Investors can also contact the Bureau for assistance or raise issues or complaints about New Jersey-based financial professionals or investments.

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