Yes, if the firm is covered by the FTC Safeguards Rule as investment advisor that is not required to register with the SEC, it needs a written security program for customer information. Citation: 16 CFR Part 314 and FTC Safeguards Rule business guidance.
Primary source: FTC Safeguards Rule business guidance
Does a state-registered investment adviser need a WISP?
Details
provides investment advice for compensation and is state-registered rather than SEC-registered. Client information lives in Form ADV files, advisory agreements, suitability or planning notes, custodial account data, portfolio-management tools, email, portals, billing records, and household financial plans. The WISP should distinguish custodian systems from adviser-controlled records. Many state RIAs are small enough for 16 CFR 314.6, but household records, prospects, and former clients should be counted carefully. The exception does not remove the program or safeguards.
Primary source: FTC Safeguards Rule business guidance.
Related obligations - not covered by this packet: state adviser books-and-records and examination rules may require separate records retention, advertising, billing, custody, and compliance files. Policywright's WISP packet does not satisfy those securities-recordkeeping duties.
FAQ
Does a state-registered investment adviser need a WISP?
Yes, if the firm is covered by the FTC Safeguards Rule as investment advisor that is not required to register with the SEC, it needs a written security program for customer information. Citation: 16 CFR Part 314 and FTC Safeguards Rule business guidance.
What is the data-flow issue for a state-registered investment adviser?
Client information lives in Form ADV files, advisory agreements, suitability or planning notes, custodial account data, portfolio-management tools, email, portals, billing records, and household financial plans. The WISP should distinguish custodian systems from adviser-controlled records.
Is this legal advice?
No. It is source-cited educational content for a template product, not legal advice.