Many CPA firms have added financial planning or investment advisory services to the firm’s suite of offerings as such additional services are often a fairly natural extension of the core accounting practice. In RIA in a Box’s most recent client study published in February 2013, 11% of RIA firms offer accounting services through an affiliated entity. This percentage has been on the rise over the years as more accounting firms recognize the business growth opportunities presented with the creation of an affiliated registered investment advisory firm. In addition to increased revenue, many CPA firms also feel that the addition of an affiliated RIA firm has also allowed them to establish deeper relationships with existing clients and also be able to offer a more compelling comprehensive solution to prospective clients.
The American Institute of Certified Public Accountants, Inc. has also published The CPA’s Guide to Investment Adviser Registration which although a bit dated, is a good general resource for CPA firms exploring the possibility of starting an RIA firm.
The investment advisor registration process is administered at either the state or SEC jurisdiction level. As a CPA firm going through the RIA registration process, it will be important to disclose your outside business activity as an accounting firm. This is a very important step of the process as it’s crucial that any potential conflicts of interest be fully disclosed.
While there are some exceptions, in general, investment advisors who start an RIA firm with $100 million or greater in assets under management (AUM) must register with the SEC as Registered Investment Advisor (RIA). For a list of some of the common exceptions which allow an investment advisor with less than $100 million in AUM to register with the SEC, check out the SEC Investment Advisor Registration Overview.
Exceptions aside, prospective RIA firms who start an RIA with less than $100 million in AUM must generally register with the relevant state(s). In general, an RIA subject to state registration must register in any state in which it has a physical location, a representative physically located there, has 5 or more clients (or a single client in the states of Texas and Louisiana), or is physically soliciting in that state. Do keep in mind that there are some exceptions to these general guidelines. Each state’s registration process is also unique to the individual state. For a directory of each state’s RIA registration requirements, check out the Investment Advisor State Registration Directory.
Investment Advisor Representative (IAR) Registration Requirements (administered at the state level):
General Firm Registration Requirements
|Over 3,500 investment advisors have trusted RIA in a Box as their registration compliance consultants and our mission is to enable fellow entrepreneurs to establish their own RIA firms and remain in constant compliance with regulatory guidelines. RIA in a Box is the fastest, most efficient way to set up your advisory firm and we also offer on-going monthly compliance services packages beginning at $250 per month. We are staffed by ex-state regulators and believe we offer incredible value that can’t be matched. Check out the RIA in a Box Investment Advisor Registration Box Package.|
Note: RIA in a Box LLC is not a law firm, investment advisory firm, or a 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 as this information should not be relied upon as currently accurate. This information is provided for educational purposes only and is not an exhaustive list of regulatory requirements.