How Do Advisors Pay for an RIA Launch?

The short answer: Advisors can pay for an RIA launch from four sources, alone or combined: their own capital, a bank loan (often an SBA 7(a) loan, which a participating lender makes and the SBA partly guarantees), the support programs some custodians and platforms run for advisors going independent, and outside investors who buy a minority stake. Each source asks for something in return, from a personal guarantee to a share of the firm and a voice in its decisions. How much to raise depends on the firm's costs, how quickly client fees begin after the move, and what the advisor leaves behind at the old firm.

The four sources, side by side

Where does the first money come from?

The owners' own capital comes first, because the work before launch has to be paid for before any client signs: the entity, the registration, counsel and the technology. Client fees begin only as accounts transfer and the first billing cycle runs. What an independent RIA platform actually costs sets out how each layer is priced; this guide covers how the bill gets paid.

The regulators look at the balance sheet too. A firm with discretionary authority or custody must disclose in its Form ADV brochure any financial condition reasonably likely to impair its ability to meet its commitments to clients. State-registered firms with custody or discretion also face minimum net worth rules: the NASAA model rule sets $35,000 for an adviser with custody and $10,000 for one with discretionary authority, and Pennsylvania applies those same amounts. The model rule excuses a firm whose only custody comes from deducting its own fees, if it meets the rule's conditions.

Can an RIA get an SBA loan?

An RIA can apply like any other small business. Participating lenders make 7(a) loans, and the SBA guarantees a portion of each. The borrower must be an operating, for-profit business in the United States, small under SBA size standards, creditworthy, and unable to obtain the credit on reasonable terms from non-government sources. Short- and long-term working capital, equipment, and furniture and fixtures are all eligible uses, and the program's maximum is $5 million.

Working-capital loans run 10 years or less. The rate is negotiated with the lender within maximums the SBA sets above a base rate, and holders of 20% or more of the business generally must guarantee the loan personally. The same program finances practice purchases, which buying a financial advisor's book of business covers.

What do custodian and platform programs provide?

Some custodians and platforms run programs for advisors moving to the RIA model. In May 2025 one of the largest custodians announced a fee-based membership program, launching that July, for advisors making that move, typically with $50 million to $300 million in client assets, covering business and operations planning, consulting, a peer community and ongoing coaching, with the advisor keeping full ownership and control of the firm. Programs differ, so the same four questions apply to each: what is provided, what it costs, how long it lasts, and what it requires of the firm.

What does a minority investor take?

A minority investor buys part of the firm, and with it whatever rights the investment documents grant: seats on a board or management committee, consent rights over major decisions, a share of distributions, and terms for a later sale or the founder's succession. Those terms outlast the launch, and who owns the firm you're joining sets out the ownership questions worth asking of any outside owner.

A stake of 5% or more is also public. Schedule A of Form ADV Part 1A lists direct owners of 5% or more, and for an LLC the members who contributed or would receive 5% or more of capital, with ownership codes by size. Schedule B follows entity owners up the chain to their own 25% owners. Every 25% owner is a control person under the form's definition, and the Part 2A brochure names anyone owning 25% or more as a principal owner.

The later sale is where minority terms matter most. For an SEC-registered adviser, every advisory contract must provide that it cannot be assigned without the client's consent, and the Advisers Act counts a transfer of a controlling block of the firm's voting securities as an assignment. How a stake can grow, be bought back or be sold is set in the documents, and is a question for counsel before signing.

What does the old firm still hold?

The balances at the old firm belong in the launch budget. Before the resignation date, price three things with counsel: any forgivable note still outstanding and what it says happens on resignation, which leaving before your forgivable loan is forgiven walks through; any unvested deferred compensation and the plan's terms on departure, covered in what happens to deferred compensation when you leave; and any loans or credit lines held against accounts at the old firm. The answers change how much capital the launch needs and when it is needed.

The capital plan sets the pace for every other step in starting your own RIA. Winthrop's RIA Search & Launch models capital needs alongside the custodian search and the launch sequence, and the RIA Launch Checklist lays the steps out on paper. The advisor never pays Winthrop. Request an introduction.