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Why is a Nebraska Broker-Dealer/ Investment Adviser Bond Required?
Being an investment advisor is a serious business. You're in charge of helping clients invest their hard earned money so it can grow and be there for them during retirement or to help hit other life goals.
This is what separates an investment advisor from a broker dealer. As an investment advisor, you are a fiduciary for your clients. This means you have a legal obligation to act in your clients best interest.
The primary goal of the licensing process is to identify the individuals and businesses that have the best chance of being successful.
And yet despite being a fiduciary and going through the steps to obtain a license, every year there is a small handful of investment advisors who will purposefully and financially harm their customers to make more money.
Examples of these fraudulent actions:
- Charging exorbitant or false fees
- Failing to provide promised services
- Offering products with higher fees when they aren't a proper fit for the client
- Enrolling clients into investment schemes
If a client is financially harmed by an advisor, they can try to recoup some or all of the financial damages by making a claim against the surety bond. If the claim is deemed legitimate, the bond will pay out, but the financial compensation is capped at the bond amount.
The surety bond requirement is the primary tool the Department uses to hold you accountable to the promises you make as a licensed investment advisor.
What is the Nebraska Investment Advisor Bond Amount
The Department of Banking and Finance requires you purchase a $25,000 bond.
| Bond Amount | License Classifications |
|---|---|
| $25,000 | Investment advisor bond |
$25,000 is the cap for any one or the sum of multiple claims.
Do You Have Cash Reserves In Excess of $25,000?
If you have cash in a bank account greater than $25,000, you do not need to purchase a surety bond.
Each year during your license renewal (December 31st), you will have to provide proof of these cash reserves or you'll be required to purchase a bond to renew your license.
How Much Does a Nebraska Investment Advisor Bond Cost?
Investment advisor bonds are priced by a surety. A surety is an insurance company that underwrites surety bonds and in this case, investment advisor bonds.
This bond is called a credit driven bond. This means the personal credit of the business owner or owners will be the primary factor that determines the price you'll pay.
The other two factors that are considered by the surety are:
- Business industry and experience
- Bond history if an owner has been bonded in the past
Based on these factors, the surety will determine a rate and this rate multiplied by the $25,000 bond amount is the price you'll pay.
This is how you can save a lot of money when you purchase your bond. It doesn't make sense, even to us, but different sureties will quote vastly different rates, one to three percentage points different.
How You Can Save Hundreds of Dollars Purchasing Your Bond
We are Surety Bonds Direct, a specialized surety agency that works with multiple A-rated sureties to find our customers the lowest possible price for their bond.
We'll find you the lowest pricing and you have no obligation to purchase. It's just free information so you know your price and you can plan appropriately.
Investment Advisor Bond Price Example
Here is example pricing based on rates that range from excellent to average.
Pay attention to how much money you can save by getting a lower rate.
| Bond Amount | Premium Rate | Total Cost |
|---|---|---|
| $25,000 | 0.05% | $125 |
| $25,000 | 1% | $250 |
| $25,000 | 2% | $500 |
| $25,000 | 3% | $7500 |
| $50,000 | 4% | $1,000 |
The application fee for getting licensed is $200. You can easily have the money you save purchasing your surety bond to pay for that fee.
Click here to request your price or you can call a bond specialist to start the process at 1-800-608-9950. It takes less than one business day to receive your price quote.
How Long Does The Nebraska Investment Advisor Bond Last?
Every surety bond has bond term and your bond term is 12 months from the active date. When you purchase your bond, you will choose the date you want the bond to become active.
This is a continuous bond meaning the original bond will remain active without having to be re-issued as long as the renewal premium is paid each year.
This is another great reason to work with a surety agency like Surety Bonds Direct. You'll get assigned a bond specialist to manage your bond for you.
About 30 to 45 days in advance of your bond's expiration date, your bond specialist will contact you to remind you of the renewal and assist in making any updates require for your bond.
Just pay the renewal premium and your bond will remain active.
Again you won't have to file your bond again with the Department of Banking and Finance.
Get Your Bond Pricing Today
You can get pricing for the Nebraska investment advisor surety bond you need. Click the button below. You need to know the amount of your bond.
Need Help? Call Us Today
Talk to a bond specialist today. They will help you find the surety bond you need and get you the lowest possible price. 1-800-608-9950
Broker-Dealer/ Investment Adviser Bonds And Getting Your Nebraska Business License/Registration
Here are the details and the forms from the Department's website.
At a high level the steps for getting licensed:
- Complete the application with a $200 application fee
- Complete the Affidavit of Investment Adviser Activity
- Provide a current and audited financial statement
- Submit a copy of your businesses formation documents on file with the Secretary of State
- Submit a corporate resolution
- Purchase the surety bond
- Submit your contract and agreement templates
If you have any questions about the bonding requirement, you can call a bond specialist at 1-800-608-9950
Can't find what you're looking for? Let us help!
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