How Do You Build Your Own RIA From Scratch?

The short answer: Starting your own registered investment adviser and building it from scratch takes six things, roughly in this order: a legal entity, registration with the SEC or your state, a Form ADV filed through the IARD system, a written compliance program with a named chief compliance officer, a custodian to hold client assets, and a plan for the day you resign. Firms with $100 million or more under management can register with the SEC, and at $110 million they must; most smaller firms register with their state. Once a complete application is filed, the SEC has 45 days to grant registration or begin proceedings to deny it, and SEC filing fees run $40 to $225 depending on assets.

For an advisor leaving a wirehouse or a broker-dealer, the order matters as much as the steps. Much of the preparation happens before resignation, and the registration has to be effective before the first client signs. This guide walks through each step as it happens in a breakaway, with the rule behind it. To work through it on paper, download the RIA Launch Checklist.

The steps, in the order they happen

Steps 1 through 6 are mostly prepared before resignation. For a registered representative, owning or working for a new adviser while still registered with a broker-dealer can require prior written notice to that firm under FINRA's outside business activity rules. When to file, and what you may do while still at your current firm, depends on your agreement and is a question for counsel; how to leave a wirehouse and go independent sets out that sequence.

What each step involves

1. Decide SEC or state

Registration follows assets under management. A firm with $100 million or more can register with the SEC, a firm at $110 million or more must, and an SEC-registered firm can stay with the SEC until it falls below $90 million. Most firms below $100 million register with their home state instead. State registration has its own costs: fees vary, and some states require a minimum net worth or a surety bond, more for firms with discretion or custody. 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. What a small RIA is covers the line in more detail.

2. Form the business

The firm is a legal entity before it is anything else: usually an LLC or a corporation, with its name, tax registration and bank account set up first. For a team, this is also where the hardest conversations belong. Ownership, decision rights and what happens when a partner leaves are cheaper to settle in the operating agreement on day one than after the first good year.

3. Get licensed

Each person who gives advice registers as an investment adviser representative. That usually means passing the Series 65, or the Series 66 with a Series 7, and most states waive the exam for holders of designations such as the CFP. Timing matters for anyone dropping broker registration: FINRA qualifications lapse two years after a person stops being registered unless the person joins FINRA's Maintaining Qualifications Program, and lapsing your Series 7 when you go RIA walks through what that means.

4. Choose a custodian and technology

An RIA does not hold client money itself. When an SEC-registered firm has custody of client funds or securities, which includes having authority to deduct its fees from client accounts, SEC rules require them to be held by a qualified custodian, usually a bank or a broker-dealer, and the custodian decides whether to take the firm on. The portfolio, reporting and client-relationship systems are chosen alongside it, because they have to connect on day one. How custody actually works explains where the money sits.

5. Build the compliance program

Every SEC-registered adviser must have written policies and procedures reasonably designed to prevent violations, review them at least once a year, and name a chief compliance officer; state-registered firms follow their state's equivalent rules. In a new firm that is often a founder, sometimes with outside support. The same build includes a code of ethics covering personal trading, and a books-and-records system: most records are kept for five years, the first two in an office of the adviser.

6. File Form ADV

Form ADV is the firm's public registration. Part 1 describes the business, Part 2A is the plain-English brochure clients receive, Part 2B is a supplement for each advisor, and SEC-registered firms serving retail investors add Form CRS, a short relationship summary. It is filed electronically through the IARD system, and the account has to be funded before the filing goes through. SEC filing fees are $40, $150 or $225 depending on assets. Once the application is complete, the SEC has 45 days to grant registration or begin proceedings to deny it, and how to register an RIA covers the filing in detail.

7. Resign

Once registration is effective, the advisor can resign, and the former firm has 30 days to file the Form U5, with a copy to the advisor. What client information can come along depends on the advisor's agreement and on the Broker Protocol: the Protocol applies only when both the firm being left and the new firm are signatories. When to file, and what may be done while still employed, are questions for counsel before any of steps 1 to 6 begin.

8. Repaper clients

Clients sign new advisory agreements with the new firm and receive the Form ADV brochure at or before signing, along with each advisor's supplement and, for retail clients of an SEC-registered firm, Form CRS. Their accounts then transfer to the new custodian.

9. Run it

Registration is the start of the obligations. Form ADV is amended every year within 90 days of the fiscal year end, when the brochure has changed materially, clients receive a summary of those changes within 120 days of the fiscal year end, and the compliance program gets its annual review. New SEC-registered firms should be ready for an early examination: the SEC's 2026 examination priorities say it will prioritize examinations of newly registered advisers.

The steps themselves are public. The judgment is in the order, the custodian fit, and the day of resignation, which is the work of Winthrop's RIA Search & Launch. Request an introduction.