Compliance Consulting Services for State and SEC Registered Investment Advisors
FREQUENTLY ASKED QUESTIONS
Starting a New RIA​
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Q: Should I be SEC registered or State registered?
A: Though there are many ways to qualify for SEC registration, most SEC firms generally have over $100 million in assets under management.
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Q: How long does the process take to get registered?
A: Generally, 6 – 8 weeks, but it mostly depends on the length of time it takes the SEC/State to review the application. If you're applying for a State-registered firm, some States take significantly longer than others. Please contact us to inquire about your specific State's current estimated wait time.
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Q: How much does it cost to get set up?
A: If you get a compliance firm to assist with your new RIA set up, it can range anywhere from approximately $4,000 - $20,000+.
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Q: How much does ongoing compliance cost?
A: Depending on the complexity of the RIA and other factors, such as which compliance consulting firm is assisting your firm, annual costs generally range from $3,000 - $10,000+.
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Q: If I have disclosures, will that prevent me from starting my own firm?
A: It depends on the nature of the disclosures; most commonly, it doesn’t prevent you from starting your own firm but may delay the approval process with the State.
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Q: What licenses do I need to start my own RIA?
A: Generally, either a Series 65 OR a Series 7 AND 66; in lieu of those licenses, a CFA, CFP, CIC, PFS, or ChFC also qualify.
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Q: Will my current firm find out if I begin the process of starting my own firm?
A: It is possible to submit an application with the State or SEC without your current firm finding out; contact a securities attorney and/or compliance consultant for detailed information about your particular situation.
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Q: Who can I contact for additional information?
A: Polaris Compliance Consulting, LLC; (888) 240-4299; www.polariscompliance.com; tchamberlain@polariscompliance.com.
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Established RIAs
Q: I'm currently registered with the State and I have about $90M in AUM. When can I register with the SEC?
A: An application can be submitted at any time if you've had $100M or more in AUM within the past 90 days. If you prefer to stay with the State as long as possible, it is possible to stay with the State until you report $110M or more during an Annual Update.
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​Q: My firm is currently registered with the SEC. Why is the State contacting me?
A: The SEC has jurisdiction over its registrants which are FIRMS. The States have jurisdiction over individual ADVISORS ("IARs"). Even if your firm is registered with the SEC, the State still charges notice filing fees, IAR fees and can implement Continuing Education to the IARs registered in that particular State. Additionally, a State can reach out to an IAR as it relates to inquiries and investigations.
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Q: My firm is currently a State-registered RIA. When is my firm required to registered with additional States?
A: Every State has its own requirements, but generally an RIA should register in additional States when the firm has over 5 clients residing in that State and/or has an IAR located in that State. Most States have de minimis exemptions on the number of clients, but certain States such as Texas, Louisiana, Nebraska and New Hampshire do not have full de minimis exemptions.
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Q: Am I required to maintain my compliance program on some type of compliance software?
A: There are no requirements on how compliance is organized and documented, therefore firms do this differently. Software can be very helpful the larger the firm, and the greater the number of IARs, but ultimately, it's a personal preference on whether you choose to utilize a compliance software.
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Q: How often will I be audited?
A: There's no way to be certain when a firm will be audited, however there are certain factors. Many jurisdictions conduct routine examinations based on a firm's regulatory risk level. A firm could be on a 1, 3, or even 10 year routine cycle and it depends on the jurisdiction on how they determine their audit schedule. Other jurisdictions don't have set schedules but conduct examinations as resources allow. Additionally, audits can be conducted based on certain information obtained by the jurisdiction, rather than a "routine" audit.
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* The information above is general in nature and based on common questions we receive from firms and advisors. For more accurate information, please contact us regarding your specific situation. Your specific situation may result in different answers than those presented above.