Short answer
Decide what the person will do before you decide what to pay. A hire who gives advice, or regularly meets and communicates with clients, is likely an investment adviser representative (IAR) and needs an exam and a registration. A hire who handles paperwork, scheduling and data entry often does not. The SEC's definition leaves out a supervised person who does not regularly solicit, meet with or communicate with clients, and one who gives only impersonal advice. [2] State-registered firms follow their state's rules, so confirm the test with your state regulator. [4]
Common first hires
| Role | What it covers | Licensing question |
|---|---|---|
| Client service associate | Account paperwork, scheduling, onboarding and service requests. Kitces says a first hire is typically one. [1] | Turns on whether the person regularly communicates with clients about advice. |
| Associate advisor | Planning work and client meetings. Kitces says a second hire is typically one. [1] | Likely an IAR: Series 65 or a waiver, plus state registration. |
| Operations or compliance manager | Custodian, billing, reporting and compliance tasks. | Not an IAR if the person does not advise or solicit. A chief compliance officer must be a supervised person. [5] |
| Lead advisor or partner | Brings and serves clients. | An IAR. Ownership adds agreement and succession questions. |
What a first hire changes
Kitces Research measured how support staff change a solo advisor's week and revenue. [1]
- Unsupported solo senior advisors spend 8.6% of working hours on administrative tasks (169 hours a year). That falls to 7.4% (145 hours) with a first hire and 5.9% (116 hours) with a second.
- Median revenue is $182,500 for unsupported solos and $500,000 or more for supported solos. At the 75th percentile it is $350,000 against $900,000.
- Earlier Kitces research found that the most productive advisors spend about 10 percentage points more time in client meetings than the least productive, roughly 4 extra hours a week, and nearly doubled their income by using back-office support. [6]
To see what a hire frees up in your own week, use the advisor capacity calculator.
Employee or contractor
The IRS asks whether the business has the right to direct and control the worker, using three kinds of evidence: behavioral control, financial control and the type of relationship. No single factor decides it, and either side can ask the IRS for a determination on Form SS-8. [7] Under the Advisers Act, a supervised person includes an employee and any other person who gives advice on the adviser's behalf and is subject to its supervision and control. [8] A contractor who advises for you can therefore still carry compliance obligations. Ask your attorney or accountant before you choose.
Licensing and compliance steps for an advisor hire
- Exam. Pass the Series 65, or the Series 66 (which requires a valid SIE and Series 7 at registration), or qualify for a designation waiver of the Series 65 (CFP, ChFC or MSFS, CFA, PFS or CIMA are accepted by most states; a CPA alone does not qualify). A designation does not waive the Series 66. [3]
- Register as an IAR. The firm files a Form U4 for the person. [3] For an SEC-registered firm, a state may license an IAR who has a place of business in that state. [9] An IAR's place of business is an office where they regularly give advice or meet clients, or any location publicly held out as one. [2]
- Mind the exam clock. In most states a passed exam is valid for two years to become registered, and stays valid while the person remains registered. [3]
- Brochure supplement (Part 2B). Prepare one for each supervised person who formulates investment advice and has direct client contact. Deliver it before or at the time that person begins advising a client. [10] [11]
- Code of ethics. Give the new hire the code and get a written acknowledgment. A supervised person with access to nonpublic information about client trades, holdings or recommendations is an access person, who files a holdings report within 10 days of becoming one and at least every 12 months, plus quarterly transaction reports within 30 days of quarter end. [12]
- Keep Form ADV current. The annual updating amendment is due within 90 days after fiscal year end. [13]
Pay and structure
We did not find a published benchmark of associate advisor pay structures we can cite, so none is given. Two sourced points on structure. Cerulli recommends a longer-term approach in which rookies join larger teams with long-term career development plans; 73% of practice management professionals call the time needed to learn the business a major challenge, and 67% say day-to-day training takes too much time. [14] In Schwab's 2025 survey of independent advisors, 29% planned to hire strategically and 26% were exploring outsourcing as ways to scale. [15]
If a hire might become an owner someday, plan for it early: see the succession and M&A guides.
This guide is educational, not employment, tax or legal advice.