RIA Compliance and Practice Management Blog

Don't Forget to Pay the new California Individual Investment Adviser Representative Renewal Fees

Posted by RIA in a Box

Jan 6, 2014 10:51:00 AM

The state of California has always charged an initial registration fee of $25 for individual investment adviser representative (IAR) registrations. Beginning in 2014, California is now also charging an annual IAR registration renewal fee which is likely to be $25 per representative. However, given that the new California IAR renewal fee did not become officially effective until January 1, 2014, registered investment adviser (RIA) firms with IARs in the state of California were not charged this new IAR renewal fee on their preliminary FINRA IARD renewal statements. 

Thus, any RIA firms with IARs in California will shortly receive a revised IARD statement which will include the new California IAR renewal fees. The state of California is still working through the timing details but it's likely that the new IAR renewal fees will be due around January 31, 2014. It is very important all investment advisory firms with IARS in California do not fail to pay this new IAR renewal fee as it could result in the termination of the IAR registrations.

It is important to note that even if the RIA firm is registered with the SEC, all IAR registrations are administered at the state level. Thus, the new state of California individual investment adviser representative renewal fee also applies to all SEC-registered RIA firms who have IARs registered with the state of California. The failure of SEC-registered RIA firms to properly register IARs at the state level is a common RIA compliance mistake. 

While the state of California's new IAR registration renewal fee of $25 per year is a new fee now being charged to RIA firms with IARs in California, the state of California's IAR renewal fee ranks as the 3rd lowest among the 48 states (and the District of Columbia) that charge IAR registration renewal fees. Despite the state of California's relatively modest IAR renewal relative to its state peers, as RIA compliance consultants, we recommend that all RIA firms registered with the state of California should anticipate the frequency of regulatory examinations to increase with this additional state revenue. With more than 4,500 RIA firms, more investment advisory firms are located in the state of California than in any other state in the country.* Thus, even this small IAR renewal fee will yield quite a bit of new funding to the state of California. 

Top 10 Lowest IAR Renewal Registration Fees Charged by States
1) Colorado $15
2) Washington $20
3t) California $25
3t) Hawaii $25
3t) Indiana $25
6t) Idaho $30
6t) Iowa $30
6t) Maine $30
6t) Virginia $30
10) Ohio $35


At the beginning of 2013, there were 5 states that did not charge an annual renewal fee for IAR registrations. Those 5 states were: California, Louisiana, Minnesota, New York*, and Wyoming*. As we kick off 2014, now only 4 of those states will continue to not charge IAR renewal fees. Those states are Louisiana, Minnesota, New York*, and Wyoming.* Although Minnesota is not charging an IAR renewal fee at this time, the state of  Minnesota did recently adopt new IAR registration guidelines which mirror most of the rest of the states. Check back next week for a more detailed update on Minnesota's new investment adviser representatives registration requirements.

Download Our Free How to Prepare for an RIA Regulatory Exam Checklist

* Source: California Investment Advisor Registration Requirements.
** The states of New York and Wyoming do not participate in the traditional IAR registration process.


Topics: RIA Compliance

RIA in a Box LLC is not a law firm, investment advisory firm, or CPA firm. RIA in a Box LLC does not provide legal advice or opinions to any party or client. You should always consult your relevant regulatory authorities or legal counsel if applicable.

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