RIA Registration Requirements & Exemptions


RIA Registration Exemptions And You

Considering a new business model for your investment advisory firm? You’ll soon be faced with the question of registration. Which regulator should you register your new independent investment advisory firm with–state, or federal regulators?

Most new advisory firms will opt for the regulator in the state where they will maintain their principal place of business. Other new firms may opt for a federal exemption and register with the Securities and Exchange Commission (SEC).


Federal Exemptions for RIA Firms

These federal exemptions exist, and may be applicable to your firm. It depends upon how your business model will operate, as well as the services that will be provided.

While it’s not a complete list of all federal exemptions, here are some common ones. Consider these when thinking about your RIA registration exemption:

  • Your principal office and place of business is outside the United States
  • You are a pension consultant with respect to assets of plans having an aggregate value of at least $200,000,000
  • You are a related advisor that controls, is controlled by, or is under common control with an investment adviser registered with the SEC
  • You are a multi-state adviser that is required to register in 15 or more states
  • You are an Internet Adviser relying on Rule 203A-2(e)

Registration Service for Robo-Advisors

One federal exemption that is becoming more common among firms is the Internet Advisor Exemption.

This exemption is most popular among Robo-Advisors, and is available to advisory firms that provide investment advice to clients exclusively through an “interactive website.” Under the Investment Advisers Act of 1940, this means a website in which software-based models or apps provide investment advice to clients based on personal information they provide.

Form ADV Part 1 and Form ADV Part 2 Brochure

As with any investment advisor registration, the Form ADV Part 1 and Form ADV Part 2 Brochure need to be carefully drafted to specifically describe how the Robo-Advisor intends to offer its advisory services through its interactive website.

Series 65 or Series 66 Licenses

Registration for Robo-Advisors, like other registered investment advisor firms, requires that an individual be licensed with either the Series 65 license, or the combination of the Series 7 and 66 licenses, or hold a professional designation recognized by the state.

The individual’s Series license will be reported to the state regulatory body by using a Form U4. The filing of the Form U4 is applicable even if you utilize one of the federal RIA registration exemptions mentioned above.


Free Consultation Services for RIA Firms

Need help navigating the world of registration and exemptions? Contact Registered Advisor Services for a free consultation and for other helpful RIA Registered Investment Advisor services.

You can also reach out for expert guidance on the SEC RIA registration requirements, as well as the RIA state registration requirements.