This section describes the types of licensing needed to offer access to U.S. securities through DriveWealth, as well as which licenses support which kinds of product offerings. It also discusses integration with DriveWealth on a fully disclosed versus omnibus basis.
For the most part we’ve discussed these requirements already, but here you can refresh your memory of the details or explore how a change in your customer experience could affect your integration or registration status.
- Self-directed trading
- Advisory on a discretionary and non-discretionary basis
- Robo Advisory on a discretionary basis
- Retirement investing
- Health Savings Account investing
- Embedded investment experiences like round-ups, rewards and boosts
By now, you’ve determined what kind of investing experience you’d like to offer. If during your integration something changes or you realize you’d like to expand your offering, please tell our team as soon as possible.
Every DriveWealth partner must be a registered broker-dealer or a registered investment advisor in order to offer the U.S. securities and investing experiences DriveWealth’s platform supports. DriveWealth is a carrying broker dealer, one of 14 in the U.S. This means that we can be the broker of record for partners with a correspondent license.
Registration can be a daunting prospect. For those who do not want to go through the registration process, there are two options:
- Partner with an existing registered broker-dealer or investment advisor. Under this arrangement the broker or advisor would take regulatory ownership of the DriveWealth account. The unregistered partner would introduce (likely as the front-end technology provider) its accounts to the registered introducing partner.
- Purchase or acquire an interest in a regulated entity. If your issue with registration is speed to market, this path could allow you to utilize the licenses, infrastructure, and existing supervisory persons in an existing entity.
A “self-directed” trading experience means that the user selects their own investments without receiving advice. If you are building this kind of experience, you will need to be registered as a broker-dealer. You will receive your customers’ orders and send those orders to DriveWealth for execution, clearance, and settlement. DriveWealth supports traditional self-directed brokerage on both a fully disclosed and omnibus basis as well as wallet brokerage.
A “non-discretionary” or “third-party advised” investment service refers to a relationship wherein a customer pays an investment advisor for advice, but does not assign authority to the advisor to trade on their behalf. To offer this type of service you must be a registered investment advisor. You and your customers will enter into an investment advisory arrangement, but the customer will make their own trading decisions, placing their order through your platform, which you will pass on to DriveWealth for execution, clearance, and settlement.
Updated about 2 months ago