What is considered additional compensation?
1 Like
Another somewhat related question: Is there a Consent to Service of Process form for the SEC for BDs and federally-covered advisers or is it just a state administrator thing?
1 Like
Hi @Mass_coffee_louse - great questions.
What is considered additional compensation?
This is any compensation received by an adviser or IAR outside of their normal compensation. For example, let’s assume an IAR is paid a $100,000 base salary with a year-end bonus based on performance. Both the base salary and the bonus are normal forms of compensation.
Let’s assume the IAR lands a deal with a fund company (e.g., Vanguard, Fidelity) to sell their funds. For every dollar sold, the IAR collects a small commission from the fund company. This would be an example of additional compensation. Something like this isn’t exactly an outside business activity (OBA) like driving Uber on the weekend. OBAs typically involve compensation from a completely different source outside of their employing firm. Additional compensation is still received through their IAR roles, but from outside sources (e.g., a fund company).
Is there a Consent to Service of Process form for the SEC for BDs and federally-covered advisers or is it just a state administrator thing?
Short answer - yes, there is. Longer answer - the process and forms are a bit different, but it’s the same idea. Good news - you only need to know the state version for the exam.
2 Likes