Federal Covered Advisor

If your cousin asks you what he should do with the $300 he got in Christmas card money, you can feel free to give him advice without registering with any federal agencies. However, if your cousin happened to collect $30 million in Christmas card money, you might have to start filling out some paperwork before issuing any investment suggestions.

An investment advisor that reaches a certain size needs to register as a Federal Covered Advisor with the SEC. The designation comes into play when the advisor manages or advises more than $30 million in assets, or fulfills a few other potential size tests (like providing advisory services in at least 15 states).

The logic? If you're that big of a swinging...advisor, then you need to follow the hoop-jumping rules of the entire nation, not just your state.

What time is it? Series 7 time.