If you’re thinking about starting an RIA, you might wonder, “when must an RIA register with the SEC?” Generally, an RIA with or expecting to reach $100 million or greater in AUM within 120 of registration should register with the SEC as an RIA.
You’ll want to hire someone with a proven record of keeping the SEC happy. Unless you’re establishing an RIA with more than $350 million in AUM, a full-time CCO probably doesn’t make sense. You’ll probably need part-time support.
Key Takeaways from this article
- Hiring a compliance consultant is well worth the expense for an RIA, given the complexity of registration, filings, policies, and ongoing requirements.
- Hiring the right consultant means coming armed with the right questions — covering the basics, asking about their book of business, and understanding if they’ll be a cultural fit for your firm.
- Many of the advisors on the Altruist platform have had success with AdvisorAssist and RIA-in-a-box (on average, you can expect to pay about $4k).
Most advisors will hire a consultant
AdvisorAssist and RIA-In-A-Box have some solidly priced services and have helped many of our customers make the move. But what makes this particular expense worth it?
Consider the alternative: forgetting a simple ADV update or not pre-clearing a routine trade could result in a fine, a costly deficiency letter, or an event you’ll forever need to disclose to every client. Some consultants will promise the world, charge a fortune, and only give you off-the-shelf templated documents. It’s easy to get caught up in their sales pitch if you’re unfamiliar with the requirements. At a minimum, you’ll need the following:
- FINRA entitlement
- Form ADV filing
- Form U4
- Investment Management Agreement
- Privacy Policy
- Compliance Manual & Code of Ethics
- Business Continuity Plan
- Information Security Policy
- Social Media Archiving
Again, these are the absolute minimum documents you need.
