News Department

NJ Bureau of Securities announces annual examination of investment advisers is underway

2024 Examination Seeks Insight on Firms’ Use of Emerging Artificial Intelligence Technologies

NEW JERSEY – Attorney General Matthew J. Platkin and the Bureau of Securities (“Bureau”) within the Division of Consumer Affairs Monday announced that the Bureau’s annual investment adviser examination is underway.

The Bureau, which regulates New Jersey’s securities industry, uses the examination as a risk assessment tool for the nearly 900 investment adviser firms that manage New Jersey clients’ investment accounts.  The examination seeks information regarding firm organization, business practices, and investment concentration, as well as information regarding the representatives associated with the firm.

“New Jersey is a nationally recognized leader in investor protection, and the annual examination is an essential component of the Bureau’s stellar oversight of the financial services industry,” Platkin said. “The information gleaned from the examination helps the Bureau identify and address problematic business practices before investors are harmed.”

Each year, firms are required to provide responses to questions about their business activities, including portfolio composition, compliance with regulatory requirements, and customer complaints. The questions are updated each year to reflect changes in the investment adviser industry and the Bureau’s examination priorities, including emerging technologies and the proliferation of digital assets, as well as the ongoing protection of vulnerable adults.

“People trust investment advisers to help them build wealth for a more financially secure future,” said Cari Fais, Acting Director of the Division of Consumer Affairs. “We use the investment adviser exam to ensure that financial professionals are operating in compliance with the laws and regulations that safeguard investors from unnecessary risk.”

This year’s examination has been updated to include questions on the emerging use of Artificial Intelligence (AI)-related technologies, including whether firms use those technologies for data gathering, research, or other purposes and how firms are advertising or marketing their use of it.

“AI technology may be new, but firms must follow existing rules and regulations when using it,” said Bureau Chief Elizabeth M. Harris. “From cutting-edge investment trends to basic financial practices, the information collected in the annual examination allows the Bureau to create risk profiles, provide guidance, and when necessary, ramp up oversight to proactively intervene before problems start.”

The 2024 investment adviser examination can be accessed on the Bureau’s website at www.NJSecurities.gov and must be completed by June 17.

The Bureau is charged with protecting investors from investment fraud and regulating the securities industry in New Jersey. It is critical that investors “Check Before You Invest.” Investors can obtain information, including the registration status and disciplinary history, of any financial professional doing business to or from New Jersey by contracting the Bureau toll-free 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 contact the Bureau for assistance or to raise issues or complaints about New Jersey-based financial professionals or investments.

Jay Edwards

Born and raised in Northwest NJ, Jay has a degree in Communications and has had a life-long interest in local radio and various styles of music. Jay has held numerous jobs over the years such as stunt car driver, bartender, voice-over artist, traffic reporter (award winning), NY Yankee maintenance crewmember and peanut farm worker. His hobbies include mountain climbing, snowmobiling, cooking, performing stand-up comedy and he is an avid squirrel watcher. Jay has been a guest on America’s Morning Headquarters,program on The Weather Channel, and was interviewed by Sam Champion.

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