Start an RIA | Fidelity Institutional (2024)

FAQs

How much does it cost to start an RIA? ›

Fearless advisors-turned-entrepreneurs who went ahead with their plans of establishing their own advisory firms will say that their startup costs ranged from $10,000 to $50,000. These costs can be lower or higher, depending on your location. Startup costs can vary from state to state.

Registered investment advisors (RIAs) are financial firms which manage the assets of individual and institutional investors. RIAs must register with the U.S. Securities and Exchange Commission (SEC) or a state regulatory agency, depending on the value of assets under the RIA's management.

While it may only take a month or two to get a firm registered as an RIA, typically advisors take about six months to fully complete the transition. Depending on the complexity of your business model, however, this timetable can be expanded or compressed down to weeks or even days.

Chris pointed out that operating profit margins in the RIA industry are currently at 29-30%, in part because of market strength and asset growth.

Bank Ownership of a Registered Investment Advisory Firm

A key business driver for financial institutions considering an affiliated RIA is the prospect of full control of the business activity.

Paid much like mutual fund managers, RIAs usually earn their revenue through a management fee consisting of a percentage of assets held for a client.

This means that Series 65 allows you to practice in a fiduciary capacity, offering independent advice and financial services. While most investment advisor representatives take one or both of the Series 6 and Series 7 exams in addition to their Series 65 exam, it is not required.

A: Yes. If the manager meets the requirements of Section 13(f) of the Securities Exchange Act, it must file Form 13F regardless of whether it is an SEC-registered investment adviser.

In general, the Form 13F is the most common EDGAR filing requirement for an RIA firm. It's important to note that many advisory firms meet the definition of an "institutional investment manager" for the purposes of the Form 13F filing since the firm exercises investment discretion.

While there are no legal requirements for RIAs to get certified, clients may prefer to work with an RIA who holds an industry-specific certification. Consider seeking the following certifications to enhance your qualifications and provide proof of your competency as an RIA: Certified Financial Planner (CFP)

How much does RIA compliance cost? ›

The first is for the initial startup costs associated with logistically setting up your RIA. This generally ranges from $10-$25k. Second is the cost for the consulting firm to provide you with compliance guidance on a going forward basis. This generally ranges from $8-$15k per year.

The SEC has a regulatory requirement to approve or deny investment advisor applicants within 45 days of the firm's initial filing. Most state securities regulators have very similar time periods usually between 30 and 45 days.

It depends on who you ask but a typical answer is anywhere from 50 to 150 clients per advisor. Having 50 clients could be enough if you're focusing on high-net-worth individuals. Meanwhile, 150 clients are usually considered to be the upper limit of what an advisor can realistically manage.

Paid much like mutual fund managers, RIAs usually earn their revenue through a management fee consisting of a percentage of assets held for a client.