Learn How to Start a Registered Investment Advisor Firm

How to File for a Registered Investment Advisor Firm

There are effectively two types of Registered Investment Advisor Firms. The first one is a State Registered Investment Advisor whereby the Applicant would have less than $100 Million AUM. The second type would be an SEC Registered Investment Advisor (RIA) in which the Applicant would have more than $100 Million AUM.

Both of these would have a similar Application process as follows:

  • Choose a name

  • Open a bank account

  • Fill our Form ADV Part 1 and Form ADV Part 2 as applicable. As a part of the filing, the Firm will prepare a brochure which outlines the services, fees, background, and other general information of the Applicant.

  • Form a corporation

  • File with the Financial Industry Regulatory Authority (FINRA) the FINRA Entitlement Forms

  • A client Advisory Agreement needs to be filed as well. (This is the Agreement between the Firm and their clients indicating the services being provided and the fees being charged).

General documents & other information which will be needed for the filing are:

  • Written Supervisory Procedures
  • Code of Ethics
  • Privacy Policy
  • Background of the Principals
  • Details relating to any reportable events
  • Number of representatives
  • Number of offices
  • Detailed description of the types of business anticipated to be conducted
  • Clearing Agent Agreement

Licensing:

You will need to have a Series 65 or other equivalent license which is current such as the Series 7 & 66 (combined). If you do not have a Series 65 then one can file to take the exams without a Firm sponsorship.

A man and woman sitting at a table with an older gentleman.

Process:

The Filing is completed online and submitted to the IARD System as part of the process, if the Applicant is seeking to be a State Registered RIA then the Applicant’s home State would be chosen (Other States would be requested once the home State has approved the Application). If the Application is for an SEC RIA, then first the Application would be submitted to the SEC for approval then States would be notified through the system as well.

Typically one can expect a 6 – 12 week process depending on whether a particular State Registration is being requested or through the SEC.

[1] There are other types of filings such as a “Non-Reporting Advisor” and other exemptions relating to AUM depending in the State. As always, feel free to contact us about your specific situation.