New Jersey is checking whether investment firms are monitoring their advisors’ outside business activities for potential conflicts of interest.
The state Division of Consumer Affairs’ Bureau of Securities is making the checks through its annual investment adviser examination, which got underway on June 4. The bureau fields the examination as a risk-assessment gauge for the almost 800 investment adviser firms registered in New Jersey. Firms are asked to provide information regarding their representatives, organization, business practices and investment concentration.
“New Jersey’s nationally recognized leadership in investor protection is due, in part, to its proactive oversight of emerging trends in the investment landscape,” Attorney General Platkin said in a news release. “The annual investment exam is a critical part of investor protection because it helps the Bureau identify and address current issues that may be disruptive to the financial industry before investors are harmed.”
The bureau annually requires firms to answer questions about their business activities, including portfolio composition, regulatory compliance and customer complaints. The questions are revised every year to take into account changes in the investment advisor sector and the bureau’s priorities, including emerging technologies, the proliferation of digital assets and protecting vulnerable adults.
“Investment advisers are often entrusted with the life savings meant to support individuals in their older years or create a better future for their families,” Division of Consumer Affairs Acting Director Elizabeth M. Harris said in the release. “The annual investment adviser exam is a way to ensure that these financial professionals are operating in compliance with the laws and regulations that protect investors and safeguard them from unnecessary risk.”
The 2025 examination is checking whether firms monitor their investment adviser representatives’ outside business activities to identify, disclose and mitigate potential conflicts of interest that could interfere with an adviser’s duty to put a client’s best interest over their own.
The bureau also seeks to address new risks and potential conflicts created by the largely unregulated status of cryptocurrency and other virtual currency trading platforms.
“This year, in addition to asking firms if they have a conflict of interest policy in place, we’re digging deeper and asking if they have a policy specifically addressing outside business activities,” Acting Bureau Chief Keith A. Alt said in the release. “We want to make sure that investment firms of all sizes are making disclosure of outside business activities front and center in their fiduciary obligation to clients.”
The 2025 investment adviser written examination can be accessed here. Every registered investment adviser is required to submit the completed the examination in the electronic format provided no later than June 18. Failure to do so could be deemed a failure to cooperate with the bureau in violation of N.J.A.C. 13:47A-14.16, resulting in administrative action.
Investors can obtain information, including the registration status and disciplinary history, of any financial professional doing business to or from New Jersey, by calling the bureau 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. Investors can also request assistance or complain about New Jersey-based financial professionals or investments.
