How Do You Register an RIA?

The short answer: An RIA registers in one place, either the SEC or its home state, and which one is set by assets under management. A firm with $100 million or more can register with the SEC and must at $110 million; most firms below $100 million register with their state, though a few exemptions let smaller firms register with the SEC, including a new firm that expects to be eligible within 120 days. Either way the application is Form ADV, filed through the IARD system. SEC filing fees are $40, $150 or $225 depending on assets, and once the application is complete the SEC has 45 days to grant registration or begin proceedings to deny it. States set their own fees and timelines, and some add minimum net worth or surety bond requirements.

Registration is the step that starts the clock on everything else in a launch, which is why it is worth getting right the first time. How to start an RIA puts it in order with the other eight steps; this guide covers the registration itself: where to file, what it costs, what each regulator checks, and how long it takes.

SEC or state: who registers where

An SEC-registered firm still makes notice filings, and pays notice fees, in the states that require them, and its advisors who meet the definition of an investment adviser representative register in the states where they have a place of business, as those states require. A state-registered firm registers in its home state and in any other state whose rules require it. What a small RIA is covers how the line shapes a solo or two-person firm.

Why the 120-day exemption matters to a breakaway

An advisor leaving a wirehouse or a broker-dealer with a book of $100 million or more has a timing problem: the new firm has no assets under management until clients move, but it has to be registered before any client can sign. SEC Rule 203A-2(c) solves it. A firm that is not yet registered anywhere, and has a reasonable expectation of being eligible for SEC registration within 120 days after its registration becomes effective, may register with the SEC from the start. The firm commits on Form ADV to withdraw from SEC registration if it would not be eligible on the 120th day, so the projection should rest on the book that can actually move.

What the filing involves

The registration itself is Form ADV, filed electronically through IARD, the Investment Adviser Registration Depository that FINRA operates for the SEC and the states.

1. Open the IARD account and fund it before filing. The SEC's fee is charged against the account when the filing is submitted.
2. Complete Part 1A of Form ADV, which describes the business, its ownership, its clients and its assets. State-registered firms also complete Part 1B.
3. Prepare Part 2A, the plain-English brochure, and Part 2B, a supplement for each advisor who gives clients advice (state-registered firms file it; SEC-registered firms deliver it to clients and keep it on file). SEC-registered firms with retail investors also prepare Form CRS.
4. Register each advisor as an investment adviser representative, after the Series 65 or the Series 66 with a Series 7, or a designation the state accepts in its place.
5. Respond to questions. Either regulator can ask for changes before granting registration.

What it costs

The filing fees are the smallest part of a launch. Legal work, compliance support, technology and the custodian relationship cost far more, and what an RIA platform actually costs breaks those down.

How long approval takes

At the SEC, the clock starts when the application is complete: the SEC has 45 days to grant registration or begin proceedings to deny it, or longer if the applicant agrees. States set their own review timelines. In practice most of the time goes into the entity, the compliance program, the custodian and the brochure, and into deciding when to file relative to the resignation, which depends on the advisor's agreement and is a question for counsel. How long a transition takes covers the rest of the calendar.

Keeping the registration right

Registration has to be kept current. Form ADV is updated every year within 90 days of the fiscal year end, and that update can move a firm between regulators. A state-registered firm whose annual update shows it is eligible for SEC registration must apply to the SEC within 90 days of that filing. An SEC-registered firm that reports less than $90 million under management must withdraw from SEC registration within 180 days of its fiscal year end, unless it is then eligible to stay.

Most of the judgment in registration sits in the timing: projecting the book honestly, filing at the right point relative to the resignation, and having everything else ready when registration takes effect. That is the work of Winthrop's RIA Search & Launch, and the RIA Launch Checklist puts the whole sequence on paper. Request an introduction.