We spend a good deal of time on our blog talking about how to register a new registered investment adviser (RIA). It’s one of our core offerings, so it only makes sense.
But today we wanted to take a step back to look at a question that comes before you’re thinking about registration: How do you become a registered investment adviser in the first place?
If you’ve ever wondered how to become an investment adviser, keep reading.
Reasons to Consider Becoming a Registered Investment Adviser
The number of independent advisers has grown steadily every year for more than two decades. Between 2012 and 2022, the number of RIAs in the US rose from roughly 10,000 to more than 15,000.
Why are so many advisers choosing to go the independent route?
Here are just a few reasons you might choose to become an RIA:
- Control – RIAs get to choose who they work with, how they work, what tech they use, where they custody assets, how much to charge clients, etc.
- Focus on serving clients – In some instances, becoming an independent RIA, can give you more time to focus on your core clients, building connections and serving their specific needs.
- Flexibility – Flexibility is a huge and common reason why many investment advisory firms are registered. The financial industry is notoriously slow to adapt to the modern world. As an RIA, you can try out new tech, offer new products, and communicate directly with clients and prospects without having to go through layers of approval every time.
Now that we’ve covered some of the reasons you might want to become an RIA, let’s look at how exactly to do it.
FAQs about becoming an RIA
There is no single path to becoming an RIA. You’ll find that most of these sections are not required, so how do you become an RIA? We’ll break down that common question in four frequently asked questions and answers, giving you the insight into what you need to become an RIA!
Q: What Education Does an RIA Need?
A: RIAs do not have to have any specific degree – in fact, you don’t need to have a college degree at all, although most do.
While many RIAs have bachelor’s degrees in Finance, Economics, or some other related area, it is not a requirement. Many people who become RIAs discover their interest in the financial world after beginning their career in another area such as business or education.
Q: What License(s) Do RIAs Need?
You may know about the many licenses advisers can get, but do you know which one they are required to have?
A: Most states require that all financial advisers (RIAs and non-RIAs alike) pass the Series 65 exam, a 130-question test administered by FINRA. In order to get a passing score, you have to get 92 questions correct.
There are several other licenses you can get depending on which kinds of services and products you want to offer, but the Series 65 is the only one that is required.
Note: The S7 and S66 can be used in lieu of the S65. Additionally, there are some professional designations that can be used as well.
Here is some info on the Series 66 and Series 7 if you’re interested.
Q: What Certifications Do RIAs Need?
A: RIAs are not required to carry any professional certifications to be an adviser.
That being said, more and more advisers are using professional certifications or designations to differentiate themselves and specialize within their target niche, however there are restrictions – no senior-specific designations, and they cannot be misleading. If you’ve ever seen letters following an adviser’s name, they are most likely an indicator of which certification(s) they hold.
Some certifications just require you to complete a few courses while some require you to complete thousands of hours of on-the-job experience.
Here are just a few certifications you could earn:
- CFP®, Certified Financial Planner
CFP® is the most popular certification for advisers today and is intended to demonstrate a deep understanding of financial planning in general. Learn more.
- CDFA®, Certified Divorce Financial Analyst
If you specialize in helping clients navigate divorce, you may consider getting a CDFA®. Learn more.
- RLP®, Registered Life Planner
The RLP® is a good option for advisers interested in offering holistic advice. Learn more.
- GFP®, Global Financial Planner
Global financial planners help people navigate financial issues that arise when they move across borders. Learn more.
Q: What are the steps to establish and register an RIA firm?
A: After you have figured out your path through education, licensing, and certifications, you are ready to begin working on establishing your RIA firm!
This process comes with many different considerations. You can learn more in our article on the process here: “Navigating RIA Registration: What Your Firm Should Know.”
Now that you know how to become an RIA, the next step is up to you!
RIA Registration with COMPLY
At COMPLY, we understand how challenging it can be to navigate the complexities of RIA registration. As a matter of fact, COMPLY offers tailored consulting and technology services to help you ensure adherence to registration requirements and establish an RIA firm that’s in compliance today and in the future.
Our tools like The Ultimate New Registration Toolkit help you navigate the intricacies of registration from start to finish!
Whatever path you choose for your RIA, consider that there is tremendous value in making the necessary upfront investment to give your journey of becoming an RIA and establishing an RIA firm the best chance at future success.
Ready to become an RIA? Let’s talk!
Disclaimer: This blog post is for informational purposes only and should not be construed as legal or financial advice. It is not an exhaustive list of how-to instructions on becoming an RIA firm. Consult with qualified professionals for guidance specific to your situation and jurisdiction.