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Alabama Investment Adviser Bond
In the State of Alabama, Investment Advisers are required under the Code of Alabama Section 8-6-3 to register with the Alabama Securities Commission (ASC) and post a $50,000 surety bond. Jet Insurance Company offers the Alabama Investment Adviser Bond as a means of protection for consumers who entrust their investments to registered investment advisers, ensuring that they uphold their fiduciary obligations.
The Investment Adviser Bond is required by the ASC to be purchased by any investment adviser who maintains custody of client funds or securities, has discretionary authority over customer accounts, or maintains less than the minimum net capital of $10,000.
Jet operates as a direct surety carrier, which means the Jet team is with you through the bond application, filing with the ASC, and even dealing with claims; there are no brokers, agents, or third parties when dealing with Jet.
What Is the Lowest Price for the Alabama Investment Adviser Bond?
With Jet, the Alabama Investment Adviser Bond starts as low $50 per month with Jet’s unique monthly pricing option, or $500 per year. For investment advisers with an eye for the long term, they can lock in low rates through our 2-year and 3-year payment options. See the table below for examples of the bond’s preferred tier pricing.
| Bond Term | Cost |
|---|---|
| Monthly | $50 |
| 1 Year | $500 |
| 2 Years | $875 |
| 3 Years | $1,250 |
The Jet team is taking the surety bond process and removing the administrative red tape and the middlemen who slow you down and cost you more for your bond in commissions, interest, and fees. You get the bond you need at a competitive price, hassle-free.
What Is the Purpose of the Alabama Investment Adviser Bond?
The Alabama Securities Commission requires the Investment Adviser Bond as a tool for ensuring compliance to the Commission’s business standards among registered advisers and representatives. The bond acts as a financial guarantee that consumers who solicit the financial advice of a registered adviser will be compensated if they experience damages as a result of the adviser’s malpractice.
The Alabama Securities Commission is charged under the Alabama Securities Act with protecting the State’s investors from securities fraud, and with preserving its capital markets. Part of that mission is enforcing the licensing and registration of investment advisers to hold them accountable to the honest and ethical standards of practice. The Investment Adviser Bond ensures that customers will be made whole if an investment adviser breaches their fiduciary responsibilities, resulting in damages.
We can see in the Code of Alabama why the bond is required if investment advisers hold or manage client funds. That would be the easiest means of acting fraudulently and causing financial injury.
How to Apply for the Alabama Investment Adviser Bond With Jet
At Jet, we believe in a bond application process that is as streamlined and efficient as possible, so that you can get back to your business. Our application is simple: we will ask for some basic information such as the investment adviser’s name and social security number. We will run a soft credit check to get you the best possible rate for your bond in just minutes (don’t worry; this will not affect your credit score). Once you have completed your purchase, we will immediately file the bond with the ASC and email you a receipt and a copy for your records.
How Does the Alabama Investment Adviser Bond Get Filed to the Alabama Securities Commission?
Jet can file the bond with the Commission for you! Once your purchase is complete, we will ship the original signed and sealed bond to the ASC, and send you a copy for your records. Remember to also check the ASC’s website for the complete list of items required to register as an Investment Adviser.
If you would prefer to ship the original bond to the ASC yourself, that option will be available for you at checkout. Jet will ship you the original bond instead. The bond must be mailed to the following address:
State of Alabama Securities Commission
P.O. Box 304700
Montgomery, AL 36130-4700
Can I Cancel My Alabama Investment Adviser Bond and Get a Refund?
You can easily cancel your bond at any time with Jet! Just send written notice to Jet (an email to [email protected] is fine), and the Jet team will notify the ASC of your intent to cancel. Liability is released 30 days after notice is sent to the ASC. If you are paying through Jet’s monthly payment option, you will be charged for this final 30-day period, as the bond is still active.
If you are paying for your bond through our annual, 2-year, or 3-year options and decide to cancel, Jet will send you any premium available for reimbursement.
How Do I Renew the Alabama Investment Adviser Bond?
The Investment Adviser registration with the ASC must be renewed annually by December 31st to remain in good standing, and the Alabama Investment Adviser must also remain active.
If you are paying for your bond using Jet’s simple monthly payment, renewal is easy! Just keep making your payments from the account on file, and the bond will stay active. No extra paperwork, no renewal application.
If you are paying through our annual, 2-year or 3-year options, Jet will send you renewal reminders via mail and email well in advance of the end of the year. Once you make your payment, Jet will take care of the rest.
How Does an Investment Adviser Avoid Bond Claims?
According to the ASC Administrative Code Section 830-X-3-.21, claims against the Investment Adviser Bond may originate any time that a party is damaged by a registered adviser who has failed to fulfill their fiduciary responsibility. Infractions may include, but are not limited to such actions as:
- Operating under a fraudulent registration as an Investment Adviser
- Failing to keep adequate records per the Administrative Code
- Operating as an Investment Adviser with less than the minimum capital required
- Buying or selling securities for the account of a client without written authorization to do so
- Charging a client an unreasonable advisory fee in light of the fees charged by other investment advisers providing essentially the same services
- Failing to disclose material conflict of interest to clients in writing before advice is rendered
A more exhaustive list of dishonest and unethical practices can be found in the Administrative Code, and investment advisers should be knowledgeable of the expectations of their registration.
Any client who is damaged by an adviser’s failure to uphold their fiduciary duties may file a complaint with the ASC. Depending on the findings of the Commission, the result could be suspension or revocation of registration, criminal penalties, or a claim on the bond. Additional civil actions may be pursued by the damaged client as well.
What Happens if I Get a Bond Claim?
Notify Jet immediately if you become aware of a complaint against you with the ASC. The Commission will review the complaint for validity and determine if an investigation is necessary. If at all possible, it is in your best interest to resolve the matter directly with your client before it reaches an investigation with the Commission. Jet will also investigate and come to your defense the maximum extent possible.
If the claim is determined valid, Jet Insurance Company is obligated under the terms of the bond to pay the claim amount, up to the limit of the bond. In this scenario, consider Jet as a financial guarantor, paying on your behalf. You are still responsible for the actions that resulted in the bond claim, and will need to reimburse Jet for the amount paid. Failure to do so would result in your bond remaining inactive, and a suspension of your registration with ASC, and could jeopardize your ability to obtain a bond in the future.
