Short answer
Assets under management decide where you register. Below $25 million, you register with your state if it requires registration. From $25 million to $100 million, you generally register with your state if it registers and examines advisers. At $100 million or more, you register with the SEC. [1] A buffer applies near the line: you may register with the SEC at $100 million to under $110 million, and once registered you need not withdraw unless assets fall below $90 million. [2]
"Assets under management" in the statute means securities portfolios for which you provide continuous and regular supervisory or management services. [1] Hourly planning with no ongoing management of a portfolio is not necessarily counted, so ask your regulator or counsel how your services are measured.
Which regulator
| Situation | Where you register | Source |
|---|---|---|
| Under $25 million, and no registered fund client | State | [1] |
| $25 million to under $100 million, state registers and examines advisers | State | [1] |
| $100 million or more | SEC (optional from $100 million to under $110 million, see buffer above) | [2] |
| Advises a registered investment company | SEC | [1] |
| Pension consultant with at least $200 million of plan assets | SEC | [5] |
| Required to register in 15 or more states | SEC may be available | [5] |
| Newly formed adviser that reasonably expects SEC eligibility within 120 days | SEC may be available | [5] |
| Advises only through an operational interactive website | SEC may be available | [5] |
Your home state is where your principal office and place of business is: the executive office from which your officers or managers direct and control the firm. [6] Other exceptions exist, and each has conditions you must meet and document. [5]
The steps
- Pick your entity and address. See legal essentials for an independent RIA.
- Qualify the people. Advisory representatives need the Series 65 or an accepted waiver, or the Series 66, and a state registration. [7] See hiring your first advisor.
- Write your compliance program before you file. The SEC examines newly registered advisers within a reasonable period after registration takes effect, and has found policies that were off the shelf or untailored. [8] See building a compliance program and RIA cybersecurity.
- Get IARD access. Every adviser, SEC or state, requests access through FINRA's entitlement process by submitting the New Organization Super Account Administrator agreement, signed by an authorized signatory. File your initial Form ADV within five months of submitting it, or the user accounts are deleted and you must resubmit. [9]
- Prepare Form ADV. The form has Part 1A, Part 1B (state-registered advisers only), Part 2 (the brochure and brochure supplements) and Part 3 (Form CRS). [10] Form CRS must be delivered to retail investors and posted on your website if you have one. [11]
- Fund your IARD account and file. Fees must be credited to your Flex-Funding Account before you can submit. [12]
- Wait for approval. The SEC has 45 days to grant registration or institute proceedings. [3] State timing and requirements vary; contact your state regulator. [13]
- After approval. Deliver your brochure before or at the time you enter an advisory contract. [14] File the annual updating amendment within 90 days after fiscal year end. [15] Keep your books and records. [16]
What the SEC filing costs
The SEC's IARD FAQ lists these fees by regulatory assets under management. [12]
| Assets | Initial registration | Annual updating amendment |
|---|---|---|
| $100 million or more | $225 | $225 |
| $25 million to $100 million | $150 | $150 |
| Less than $25 million | $40 | $40 |
That FAQ is dated Oct 11, 2017 with answers updated through Oct 26, 2023, so confirm current fees in IARD before you file. State registration fees differ by state and are not in that table. [12]
State notice filings and the small-firm rule
An SEC-registered adviser makes a notice filing in each state it wants to do business in by checking that state in Item 2.C of Part 1A. Most states charge a fee, paid through IARD, separate from the IARD filing fee. [12]
A state may not require an adviser to register if the adviser has no place of business in that state and had fewer than 6 clients who live there in the preceding 12 months. State antifraud rules still apply. [4]
Switching between SEC and state registration
You test eligibility each year in your annual updating amendment. An SEC-registered adviser that reports it is no longer eligible must file Form ADV-W within 180 days of its fiscal year end. A state-registered adviser that reports it is eligible for the SEC, and does not rely on the venture capital fund or private fund adviser exemptions, must apply to the SEC within 90 days. [2] [12]
This guide is educational, not legal advice. Registration thresholds, exemptions and measurement of assets are fact-specific; talk to securities counsel or your state regulator before you file.