CPA Firms Adding Investment Advisor Registration

CPA Firms Adding Registered Investment Advisor (RIA) Registration Overview

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.

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General Overview of the SEC and State Registered Investment Advisor (RIA) Registration Process

Investment Advisor Representative (IAR) Registration Requirements (administered at the state level):

  • Licensing Requirements: Series 65, Series 66 and Series 7 combined, or CFP, CFA, CIC, ChFC, PFS. Many CPAs are able to avoid having to take the Series 65 examination by instead obtaining the PFS designation.
  • Each investment advisor representative must submit the form U-4 and ADV Part 2B in the relevant state(s).

General Firm Registration Requirements

  • Payment of all SEC and/or state registration filing fees
  • FINRA Entitlement paperwork
    • In order to file a registered investment adviser application with the SEC or a state, one must first apply to the Financial Industry Regulatory Authority (FINRA) for an account (Entitlement) to their WebCRD/IARD on-line system (the web application for the registration of RIAs and their representatives). While RIA’s are in no way regulated or supervised by FINRA, the SEC and states uses FINRA’s WebCRD/IARD system to process applications.
  • Form ADV 1 (online)
    • The Form ADV Part 1 is the on-line component to your Firm’s registration documentation. Note: The Form ADV Part 1 primarily discloses information about the FIRM. Individual information is primarily disclosed in the Form U4 as detailed below. The Form ADV Part 1 is also the vehicle to upload your Firm’s Form ADV Part 2A (Firm Brochure) and Form ADV Part 2B’s (Brochure Supplements).
  • Form ADV 2A (paper and online)
    • The Form ADV Part 2A acts as your Firm’s Brochure. It is a narrative description of your services, fees, disciplinary disclosures, as well as several other Firm details. The Form ADV Part 2A must be provided to all Clients and Prospective Clients. The SEC and states require that the ADV Form 2A be written in “plain English” and easily understood by your clients.
  • Form ADV 2B (paper and online)
    • The Form ADV 2B is the paper brochure that Investment Adviser Representatives must (in most cases) provide to clients. This form contains employment, educational, conflict of interest, and disciplinary information. Generally, Executive Officers, any person generating investment advice provided to clients, and any representative advising clients must have a Form ADV Part 2B.
  • Client Advisory Contract
    • Client Advisory Contract including an investment policy statement that meets the appropriate regulatory authority standards for client advisory contracts..
  • Policies and Procedures Manual
    • The firm’s Policies and Procedures manual is the guiding document that your firm will use to maintain and enforce your firm’s internal policies on all aspects of your business from the handling of client complaints to the training of new Investment Adviser Representatives. It also houses your firm’s Business Continuity Plan, Anti-money Laundering Policy, and Anti-insider Trading Policy.
  • Privacy Policy Statement
    • The Firm’s Privacy Policy Statement must be provided to all clients at the beginning of the client relationship and annually thereafter. It must disclose how the firm stores, and handles and disseminates client information. Privacy Policy Statements are built to your firm’s specifications and designed to meet SEC or state requirements.
  • Code of Ethics
    • Code of Ethics filing ensuring that you meet the standards of the SEC or state(s).


Over 4,000 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 that also offers on-going monthly compliance services packages. 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.