From filings to IARs to ongoing compliance, the regulatory checklist can seem a little overwhelming, especially when you’re also thinking about how much it costs to start an RIA, how to market your firm, what kind of firm you’ll be, whether you need errors & omission insurance. And the list just keeps going.
The good news? We’re here to help you navigate each and every one of the RIA registration requirements on your list.
What are our qualifications? Having worked with thousands of firms to navigate both state and SEC registration, we know what it takes, we know the pitfalls that can trip people up, and we’ve helped people just like you take the leap and start their firm.
State vs. SEC Investment Adviser Registration
One of the first and most significant RIA registration requirements you’ll need to contend with? Determining who you’ll register with. While state vs. SEC investment adviser registration has some similarities in processes, understanding who you’ll register with is a key consideration to get your firm started on the right path.
Key Questions to Help You Navigate State vs. SEC Investment Adviser Registration
- Where is your physical location or office?
- What states do you have representatives physically located in?
- In what states do you have five or more clients (or a single client in the states of Texas and Louisiana)?
- What states are you physically soliciting in?
Once you’ve answered those questions you can determine the right registration path forward. Let’s break it down.
SEC Investment Adviser Registration
- $100 Million AUM+ must register with the SEC
- Must file within the state(s) the firm maintains a place of business or has 5+ clients in the past 12 months
State Investment Adviser Registration
- Under $100 Million AUM must register with the state(s) they operate
Learn more about the state specific requirements: Investment Adviser State Registration Requirements Directory
Once you’ve determined which registration you fall under you can begin the associated processes to register and establish your firm.
A couple of things to keep in mind:
- Will You Be a Hybrid RIA? This is important to know up front as it can result in being more highly scrutinized by regulators.
- What Type of Entity Will You Be? As you form your entity, it’s critical to understand any and all pros and cons which may be associated with your selection. This can range significantly and may be a determining factor in which entity option you choose. Options include:
- Corporation
- Limited Liability Company (LLC)
- Limited Liability Partnership (LLP)
- Sole Proprietor
Interested in Transitioning from State to SEC Investment Adviser Registration?
For many state-registered firms, the determination of when to register with the SEC will be down to one critical factor: AUM.
Once you’ve reached the $100 million AUM threshold, it’s time to make the move.
However, there are several other considerations in the state to SEC journey. Learn more: The Ultimate Guide to Transitioning from State to SEC RIA Registration
Need a little help along in your registration journey? We’ve got your back.
SEC Exempt Reporting Adviser Requirements
Exempt Reporting Advisers (ERAs) are investment advisers that are not required to register as an adviser with the SEC or state regulators but must still pay fees and report public information via the IARD/FINRA system. Investment advisers can claim ERA status with the SEC in two ways, either using the Private Fund Adviser Exemption or the Venture Capital Fund Adviser Exemption.
ERAs should also check with the state(s) where they have a place of business for any state-specific filing requirements.
Check out our answers to the top ERA FAQs: Seven FAQs on Exempt Reporting Advisers (ERAs)
Filing Requirements
If you’re considering applying for one of these exemption statuses, you must file an initial exempt reporting Form ADV within 60 days of starting an advisory relationship with your first fund.
In the event your exemption no longer applies, you are required to promptly register as a registered investment adviser (RIA) firm with either the SEC or state regulators. For example, if you chose to begin managing separately managed accounts (SMAs), your exemption status would no longer apply and you would need to register as an RIA before taking on your first SMA retail client.
Post-Filing Requirements
Compliance requirements for ERAs are similar to those for RIAs in some ways, albeit with a number of exceptions that include the following:
- Limited Compliance Examinations: The SEC has the legal authority to examine an ERA’s books and records, though it generally has limited authority to conduct a “for cause” examinations, in which the SEC believes there is wrongdoing.
- Truncated Form ADV Part 1A: ERAs have to submit an abbreviated Form ADV, but are not required to prepare or deliver a firm brochure to clients (Form ADV Part 2A). Once filed with the state or SEC, ERAs must update their Form ADV annually within 90 days of the firm’s fiscal year end. Form ADV may need to be updated more frequently depending on material developments.
- Regulation D and State Blue Sky Filings: Rule 506 of Regulation D is a “safe harbor” for the private offering exemption of Section 4(a)(2) of the Securities Act. Under this rule, issuers (here, the private funds managed by the ERA) are exempt from registration with the SEC and state regulators, but they must file a Form D with the SEC and state regulators shortly after the first sale of securities is made.
- Code of Ethics: While ERAs are not required to establish a Code of Ethics or maintain a Policies and Procedures Manual, it is a best practice that helps ensure the firm’s compliance program comports with relevant investment advisory standards.
Other Areas of Compliance
As noted above, ERAs are not required to comply with all of the regulations that RIAs must follow. However, specific areas of compliance are still applicable to ERAs and include:
- Anti-Fraud Provisions
- Fiduciary Duty
- Pay-to-Play Regulations
- AML, specifically as it pertains to OFAC
- Principal and Cross Trades
- Duty to Supervise
- Insider Trading
- Whistleblower Protections
- Privacy Rules (both federal and state)
While other areas of compliance may not be codified into rules that specifically apply to ERAs, it is recommended that firms incorporate the following into their Policies and Procedures as a best practice:
- Proxy Voting Rules
- Record Keeping
- Advertising Rules
- Custody Rules
- Solicitor/Promoter Rules
Ready to make the move from ERA to RIA?
Learn more about that process here: Transitioning from an Exempt Reporting Adviser to a Registered Investment Adviser: Five Steps to Follow
All About the Exams: Series 65 Exam, Series 7 Exam, and More
The Series 65 Exam is the qualifying Uniform Investment Adviser Examination that an individual must pass to act as an IAR. However, there are exemptions available for one to meet the minimum competency requirements in most jurisdictions.
One of which? The combination of holding both the Series 7 and Series 66 licenses.
Additionally, there are several professional designations that will often be accepted in lieu of an examination, including:
- The Certified Financial Planner (CFP®)
- Chartered Financial Analyst (CFA)
- Certified Insurance Counselor (CIC)
- Chartered Financial Consultant (ChFC®)
- Personal Financial Specialist (PFS)
Series 65 Exam: The Series 65 exam, formally known as the NASAA Investment Advisers Law Examination, is designed to assess the knowledge and skills of individuals looking to become investment adviser representatives. It covers laws, regulations, ethics, and various topics important to the role of a financial adviser. The exam consists of 130 scored questions and 10 unscored questions, with a passing score requiring at least 92 correct answers out of 130
Learn more here: Exam Prep for the Series 65 Exam: FAQs and Waiver Options
Series 7 Exam: The Series 7 exam, also known as the General Securities Representative Qualification Examination, assesses the competency of an entry-level registered representative to perform their job as a general securities representative. It covers a wide range of topics, including sales of corporate securities, municipal securities, investment company securities, variable annuities, direct participation programs, options, and government securities. Candidates must pass both the Securities Industry Essentials (SIE) exam and the Series 7 exam to obtain the General Securities Representative registration.
Learn more here: What You Need to Know About the Series 7 Exam
Series 6 Exam: The Series 6 exam, or the Investment Company and Variable Contracts Products Representative Qualification Examination, evaluates the competency of an entry-level representative to perform their job as an investment company and variable contracts products representative. This includes the sales of mutual funds and variable annuities. Candidates must pass both the SIE exam and the Series 6 exam to obtain the Investment Company and Variable Contracts Products registration.
Series 66 Exam: The Series 66 exam, also known as the NASAA Uniform Combined State Law Examination, is intended to qualify individuals as both investment adviser representatives and securities agents. It covers topics relevant to providing investment advice and effecting securities transactions for clients. The exam consists of 100 scored questions and 10 unscored questions, with a passing score of 73%. Candidates must pass both the Series 66 and Series 7 exams to obtain the necessary registration.
Learn more here: What do RIAs need to know about the Series 66 license?
Note: Although these exams would qualify you to register and open your RIA, there is a continuing education component for certain jurisdictions. The good news? COMPLY has got you covered. Check out our IAR CE courses for ongoing education needs.
The Required List of SEC Filings for RIAs
Forms and filings and fact-checking. It’s enough to make your head spin. But the list of SEC filings for RIAs is a crucial checkpoint for your registration process, ensuring you’ve documented and detailed the ins and outs of your new firm.
List of SEC Filings for RIAs:
- FINRA Entitlement paperwork
- Form ADV 1 (online)
- Form ADV 2A (paper and online)
- Form ADV 2B (paper and online)
- Form CRS
One of the most challenging aspects of establishing a registered investment adviser (RIA) firm is preparing the Form ADV filings. This includes Form ADV Part 1A, Part 1B, Part 2A, Part 2B, and Part 3 (also known as Form CRS). These forms outline your firm’s business practices and the backgrounds of individuals associated with the firm. They must adhere to the specific regulatory standards set by the relevant state(s) or the SEC.
Learn more about how to correctly and effectively file your Form ADV: A Guide to Form ADV Filings for Registered Investment Adviser Firms
Additional Required Documents/Paperwork:
- Client advisory contracts
- Policies and Procedures manual
- Code of Ethics
- Privacy policy statement
- Required state paperwork (jurisdiction specific)
And filings don’t stop once you’re registered. In fact, one of the top RIA deficiencies noted by the SEC? Regulatory filing failings. Learn more about how you can avoid these common pitfalls: RIA Top Deficiencies, Part 5: Regulatory Filings
Need a little help getting your filings filed on time every time? Let’s talk.
Registering Your Investment Adviser Representative(s)
One crucial component of fulfilling your RIA registration requirements? Registering your IARs.
Who Needs to Register as an Investment Adviser Representative?
Any individual associated with an RIA firm who is rendering or providing investment advisory services, including asset management, wealth management, investment analyses, research, financial planning, and often those acting in a solicitor capacity, will need to register as an IAR. Additionally, individuals deemed to be directors, officers, controlling partners, or managing members of an RIA firm will also be required to register as IARs.
State-Specific Qualifications
Certain states have unique qualifications to become an IAR. For example, Ohio accepts a passing score on any of the following series examinations: 6, 7, 22, 24, 26, 39, 62, 63, 65, or 66. New York has its own process of registering an IAR via the New York Investment Adviser Qualification form or Form NY-IAQ.
Additional Steps for Registration
Upon passing the Series 65 exam, there are often additional steps necessary to properly register as an individual investment adviser representative, such as completing the proper filing paperwork and submitting a background and/or fingerprint verification required by certain filing jurisdictions.
Ongoing IAR CE Requirements
In 2020, NASAA introduced the IAR CE Model Rule, which was designed to:
promote heightened regulatory compliance while also helping investment adviser representatives better serve their clients by remaining knowledgeable of current regulatory requirements and best practices.
In many states, IARs are required to complete 12 IAR CE credits annually, covering:
- Six credits in ethics and professional responsibility
- Six credits in products and practice
For a list of states who have adopted the rule, as well as a breakdown of key requirements: COMPLY’s 2025 IAR CE Guide
Learn more about how COMPLY can help your IARs meet their ongoing CE requirements.
Creating a Culture of Compliance: Your RIA Compliance Program
While the topic of RIA registration requirements may feel like it should be all about filing forms and writing documents, a critical aspect is the development of your RIA Compliance Program. The SEC expects firms to have a well-established program from day one, which means you need to start developing your firm’s compliance program (and its culture of compliance) ASAP.
Understand Your Fiduciary Duty and Responsibilities
In 2019, the SEC stated an advisory firm, “owes a fiduciary duty to its clients under the Advisers Act — a duty that is established by and enforceable through the Advisers Act. This duty is principles based and applies to the entire relationship between an investment adviser and its client.”
When serving as an RIA you have a fiduciary duty to your clients, which includes:
- Duty of care
- Duty of loyalty
- Duty to provide advice that is in the client’s best interest
- Duty to seek best execution
- Duty to act and provide advice and monitoring over the course of the relationship
Establish Your Compliance Policies and Procedures/Program
The SEC places a strong emphasis on ethical conduct within registered firms. Compliance professionals should establish and enforce a robust Code of Ethics outlining standards of conduct for employees. This should include:
- The portfolio management process (including asset allocation and disclosures to clients)
- The accuracy of disclosures made available to clients, regulators and investors.
- Proprietary trading
- Safeguarding your clients’ assets
- Required record keeping (including security and protection from unauthorized use or destruction)
- Protecting the privacy of your clients’ information
- Trading practices
- Marketing of your RIA firm
- Processes to value client holdings and assess fees
- Plans for business continuity
Learn more about establishing and updating your policies and procedures: The Ultimate Guide to Creating (and updating) Your RIA Policies and Procedures Manual
Additionally, maintaining accurate and organized records is crucial to demonstrate compliance with regulatory obligations.
Your compliance team should conduct regular reviews to ensure ongoing adherence to regulatory requirements. This includes periodic updates to Form ADV, addressing changes in the firm’s structure, personnel, or business practices.
In the dynamic realm of financial regulations, compliance professionals must stay well-versed in regulatory requirements to safeguard their firms and clients. Navigating the intricate process involves careful attention to eligibility, comprehensive Form ADV filing, transparent fee structures, ethical standards, and ongoing compliance reviews.
Fact: The SEC expects newly registered firms to have a thorough and comprehensive compliance program established from day one. Because of this, many new firms have begun to implement compliance technology solutions before even registering. Learn more about how COMPLY supports newly registered firms.
Cultivating a Strong Culture of Compliance
As you establish your compliance program, it is critical to enforce a strong culture of compliance which drives standards throughout the entire firm. Best practices include:
- Open lines of communication within your firm: communication should be a two-way street, and employees should feel comfortable sharing news and asking questions
- Knowledge sharing to ensure all critical regulatory updates are well-known within your firm
- Provide customized trainings to address each group or individual’s unique role and how compliance specifically impacts their day-to-day
- Leverage third-party experts to help conduct thorough trainings and provide critical insights
- Commitment to compliance from the top-down, with leadership playing a pivotal role in relaying the importance of maintaining compliance and regulatory standards
- Develop a clear and fair policy for non-compliance
Learn more about cultivating a strong culture of compliance within your firm here: Creating and Cultivating a Culture of Compliance Checklist
Choosing the Right RIA Chief Compliance Officer
Let’s break it down: an RIA’s CCO is an executive-level professional responsible for overseeing and managing an organization’s compliance with relevant laws and regulations. Each and every firm registered with the Securities and Exchange Commission (SEC) is required to appoint an internal member of their staff as CCO.
Related: Why Do RIAs Need a CCO? 10 FAQs About the Importance of RIA Chief Compliance Officers
But, how do you know you’re choosing the right RIA chief compliance officer for your firm? And what requirements are mandated by the regulator?
Choosing the Right RIA Chief Compliance Officer: SEC Requirements
1. CCOs must be empowered with seniority and authority
According to the SEC, all CCOs:
“should be competent and knowledgeable regarding the Advisers Act and should be empowered with full responsibility and authority to develop, implement and enforce appropriate policies and procedures for the firm. And a CCO should have a position of sufficient seniority and authority within the organization to compel others to adhere to the compliance policies and procedures.”
Those three bold words are fundamental to the SEC’s requirements for the role. While “empowered” indicates a deep knowledge of the Advisers Act of 1940, “seniority” ensures a deep understanding of your firm’s unique operations and compliance needs. Likewise, the term “authority” indicates that as CCO, the individual has the power and agency to implement a compliance program.
Additionally, independence is a key theme in the SEC’s expectations for CCOs, since it’s critical for impartial assessments of compliance risks and for the effective implementation of corrective actions.
The best way to develop a deep knowledge of the Advisers Act of 1940? Enroll in COMPLY’s IA Core and IACCP programs. Learn more.
2. CCOs must design, implement, maintain, and enforce a comprehensive compliance program
The CCO is expected to design, implement, and maintain a comprehensive compliance program tailored to the specific risks and operations of your firm. The program should include written Policies and Procedures reasonably designed to prevent and detect violations of securities laws.
Developing and maintaining a comprehensive compliance program might include researching technology solutions or new tools that could streamline or improve processes. The CCO will also need to stay updated on any real or potential rule changes that could affect your team and/or clients (with the SEC, as well as any state or local regulatory agencies).
In the event that there is a violation of the compliance program at your firm, the CCO should have the authority and knowledge necessary to correct the error, enforce any consequences, and get your firm back on track.
Learn more about key regulations and rulings likely to impact your compliance program at the 2025 COMPLYConnect Conference.
3. CCOs must facilitate annual reviews
It’s crucial for CCOs to take an active role in facilitating and overseeing the annual review process to ensure compliance with SEC requirements. The goal of an annual review is to assess whether the compliance program is effective in preventing and detecting violations of securities laws and is required per Rule 206(4)-7 of the Investment Advisers Act to be completed at least annually.
Additionally, any findings or deficiencies identified during the annual review should be addressed promptly, and the compliance program should be updated as needed to enhance its effectiveness.
4. CCOs must implement employee training programs
The SEC expects firms’ CCOs to establish and maintain effective compliance programs, which includes providing training to employees to ensure they understand and comply with applicable laws and regulations.
Training helps to build a culture of compliance, in which all employees within a firm understand their personal responsibility in achieving compliance goals.
Keep in mind that training isn’t meant to be an initial or one-time endeavor, but an ongoing practice. We also recommend periodically evaluating the effectiveness of any training and making updates as needed.
5. CCOs must effectively communicate with internal and external stakeholders
The CCO will be responsible for reporting any material compliance violations or conflicts of interest to senior management, stakeholders, and – in some cases – to the board of directors. The nature and frequency of these reports may vary depending on the organization’s structure and policies. CCOs will also likely be involved in communication with SEC examiners during routine examinations or inquiries.
Related: Hiring a New Chief Compliance Officer? Look for These 9 Qualities
Furthermore, the SEC has established a whistleblower program that encourages individuals, including CCOs, to report potential securities law violations directly to the SEC. The program provides protections and incentives for individuals who come forward with credible information about wrongdoing.
6. CCOs must oversee the creation and submission of annual reports, disclosures, filings and other necessary documents
Finally, CCOs are required to submit annual reports to regulatory bodies, providing insights into the effectiveness of your organization’s compliance activities. These reports contribute to transparency, accountability and continuous improvement.
Reports and documentation include:
- Annual compliance review reports
- Filings related to changes in ownership, personnel or business operations
- Disclosure documents
- Form ADVs
- Form PFs
*Note that the above list is not exhaustive by any means and there may be additional documentation under your responsibility as CCO depending on your specific firm.
Considering outsourcing your CCO? While many firms may consider this approach, especially as they are just starting out, it can often lead to increased risk and regulatory scrutiny. Learn more about why an outsourced CCO might not be a compliance cure-all: Why an Outsourced CCO Might Not Be a Compliance Cure-All
The SEC Risk Alert for New RIAs: Maintaining Compliance
Remaining compliant amidst changing rules and heightening risk can feel like an uphill battle…especially as a newly registered RIA working to establish your business, your client base, and your revenue stream.
However, as highlighted by the SEC in a 2023 Risk Alert, regulators are not giving any grace periods to those new to the industry.
“Examinations of newly-registered advisers provide an opportunity for early engagement between advisers and the staff. Such examinations allow the staff to: provide advisers with information about the Division’s examination program, conduct preliminary risk assessments, facilitate discussions regarding the advisers’ operations and risk characteristics, and promote compliance with applicable statutes and regulations. One of the ways the staff assesses advisers’ risks is by learning about their conflicts of interest and how these risks are mitigated and managed by the advisers through their compliance programs.”
Key deficiencies noted within the risk alert include:
- off-the-shelf compliance manuals that were not tailored for consistency with the advisers’ operations and business lines.
- undisclosed conflicts of interest created by the multiple roles and responsibilities of advisory personnel carrying out the assigned duties,
- [in]adequate business continuity plans, including succession plans
- required disclosure documents that contained omissions or inaccurate information and untimely filings (i.e., material or annual form updates were not made within prescribed timeframes or at all).
- adviser marketing materials that appeared to contain false or misleading information, including inaccurate information about advisory personnel professional experience or credentials, third-party rankings, and performance
But knowing the issues is only half the battle. How do you go about protecting your newly registered firm from regulatory scrutiny?
- Ensure your Policies and Procedures are specific to your firm’s business practices, adjusting as necessary based on new practices and new rules.
- Train your personnel on all Policies and Procedures. Share the policy updates in writing and set aside time to meet and train staff members in person as well.
- If using third parties, implement appropriate protocols and due diligence.
- Review and archive all books and records according to your jurisdiction’s requirements.
- Conduct regular testing of your program.
Bonus: Leverage technology and consulting solutions to enable streamlined, comprehensive compliance for your RIA.
Starting an RIA: The Checklist
So, ready to start your RIA? We’ve got the toolkit (including a best practices checklist) to help you do it.
Download Now: The Ultimate New Registration Toolkit
Need a little help in the process? Call us at 866-583-2374 or schedule time to speak with our experts today and we can help you navigate RIA registration requirements with ease.