Your Complete Guide to Starting an RIA Firm

Whether you’re breaking away from a bigger firm or just starting out on your own as an independent advisor, the journey to launching a new RIA can feel daunting. But with the right resources, a broad support network, and a rigorous framework, it could be the best decision of your career. Here’s our outline for launching a new firm, broken out to 10 steps.


If you’re considering starting an RIA firm, you’re in good company.

According to Fidelity’s Advisor Movement Study, 96% of advisors were happy with their decision to leave their current firm – and nearly two-thirds . But while the benefits of going independent and starting an RIA firm are significant, launching your own business, especially if you’re used to the support of a broker-dealer or wirehouse, is a substantial undertaking.

First, it’s important to keep these three things in mind:

1. Don’t rush. Understand that it may take a year or more to fully launch your RIA firm – and that’s okay. Being thorough and compliant is more important than being fast, and starting an RIA firm is both complex and time-consuming.

2. Be thoughtful about client communications. A common reason advisors don’t go independent and launch their own RIA firms is their fear that clients won’t follow them when they do. Take the time to document your reasons for starting your own firm (typically, these are all in your clients’ best interests!) and proactively consider the questions or concerns they might have so you’re prepared with responses.

3. Ensure you have the necessary capital. The amount of capital you need to start an RIA firm varies depending on your firm’s size and scope, your location, and specific operational and regulatory requirements

Next, follow our comprehensive guide to make launching your RIA firm as smooth as possible…

Form a Legal Entity

As an RIA, your firm is required to be organized as a legal entity. It’s important to choose the right type of entity, and to be established as early in the registration process as possible, before you start operating your firm. RIA firms can choose to establish themselves as a sole proprietorship, partnership, corporation or limited liability company (LLC). Your choice is dependent on a number of factors, including liability protection, tax implications and ease of formation.

●  Limited liability protection: One of the key benefits of forming a legal entity is limited liability protection, meaning your personal assets are protected in the event of a lawsuit or financial loss. A corporation or LLC offers the greatest amount of protection, while sole proprietorship or partnership offers the least. Consult with a legal professional to determine the best entity for your specific situation.

●  Tax implications: The choice of legal entity can also have significant tax implications. For example, corporations may be subject to double taxation on their profits, while pass-through entities, such as an LLC, are taxed only once. Consult with a tax professional to determine the best entity for your specific situation.

●  Formation process: The process of forming a legal entity involves filing the appropriate paperwork with the state and obtaining any necessary licenses and permits. You may also need to draft articles of incorporation or an operating agreement, depending on the type of entity.

Obtain Necessary Licensing and Qualifications

Most RIAs must pass the Series 65 (Uniform Investment Advisor Law) exam, administered by the Financial Industry Regulatory Authority (FINRA) or qualify for an alternative which varies by state (i.e. a specific professional designation in good standing or maintain the Series 7 and 66). The three-hour Series 65 exam includes 140 multiple choice questions (10 won’t be scored) covering federal securities laws and other topics surrounding investment advice. Candidates must answer 94 of the scored 130 questions correctly to pass the exam.

Additional qualifications, such as professional designations, may improve your credibility and could help to drive business. Some states allow advisors carrying the following designations to waive the Series 65 requirement:

In addition, some states are now requiring RIAs to comply with certain Continuing Education obligations.

Understand Federal and State Registration Requirements

Good compliance and legal counsel are necessary to get your new RIA firm established correctly from a regulatory standpoint. Working with a compliance consultant can help ensure you don’t miss any critical steps or overlook any necessary documentation in the process of setting up your RIA firm.

SEC and State Licensing

First, you’ll need to register with the SEC if your AUM is $110 million or greater (note: advisors whose principal offices are in New York or Wyoming are required to register with the SEC at AUM between $25 million – $100 million unless a registration exemption is available).

If your assets under management are less than $110 million, you need to register at the state level in your primary state, as well as with any other states in which you have more than five clients subject to certain state specific exceptions. Firms that register with the SEC will also need to file a notice of SEC registration with each state in which they do business.

IARD and Form ADV

Next, you’ll create an account with the Investment Adviser Registration Depository, or IARD, managed by FINRA. FINRA will then provide you with a Central Registration Depository (CRD) number and an account ID, through which you can file Form ADV and U4 forms (with the SEC or the states in which you’re registered).

At its most basic, Form ADV discloses information about your RIA firm and the investment advisory services you provide. It will be used for your application to become an RIA firm. Part 2A of the ADV covers your firm, while Part 2B covers yourself and any other advisors working with you. The ADV must include:

●  All services provided to clients

●  Compensation and fee structures

●  Any conflicts of interest

●  Your firm’s code of ethics

●  Your financial condition, education and any credentials

●  Any parties affiliated with your firm

The SEC is required to respond to your application within 45 days. Once your firm is approved, you can engage in business as an RIA firm.

Obtain Insurance

If you’re moving to the RIA world from a broker-dealer or wirehouse, your previous firm likely provided insurance coverage for you. As an RIA, you’ll need to obtain your own, including:

Errors & Omissions (E&O) Insurance: E&O insurance protects you and your firm from potential lawsuits that could arise from mistakes or oversights in your professional advice or services. This insurance covers legal defense costs and potential settlements or judgements.

Cybersecurity Insurance: Because RIAs handle sensitive financial and personal information, they’re often targets for cybercriminals. Cybersecurity insurance protects your RIA firm and your clients from financial losses and reputational damage resulting from cyber attacks.

Choose a Custodian

Your custodial relationship or relationships will form the foundation of your RIA practice, so it’s important to do your due diligence before making this monumental decision. If you’re coming from a wirehouse or broker-dealer, there are advantages to using the same custodian; namely, an easier transition for you and your clients.

But don’t let that be your ultimate decision-maker. Fees, transition support and the size and structure of your practice will all contribute to your custodial decision. As you’re vetting your options, consider:

●  Services: Does the custodian offer everything you need to meet your clients’ expectations, including account administration, reporting, and trading capabilities?

  Technology: What does the custodian’s technology platform – including user interface, reporting features and integration capabilities – provide?

●  Pricing: Cost of custody services can vary greatly from one to another. Look for a fee structure that aligns with your RIA’s business model.

Determine Business Structure

How do you want your RIA firm to run? If your wirehouse or broker-dealer took care of billing, trading, and reporting, you’ll now need to decide if you want to take on those tasks in house or outsource them to a third party like a TAMP (Turnkey Asset Management Platform).

It’s important to seriously consider   when you’re just getting started, especially if you’re a small firm or a solo RIA. Remember, you’re playing the dual role of RIA and business owner now, which will require you to delegate more thoughtfully than you may have had to in the past.

Ask yourself these questions as you’re navigating the in-house vs. TAMP decision:

●  Do you want to manage a team of people as well as your book of business?

●  How quickly do you want to get up and running? Outsourcing accelerates the operational transition with a team of experts already in place to work with you.

●  What’s your budget? Depending on the TAMP, outsourcing can be far more expensive or far more affordable than hiring in house.

If you decide to hire internally, you’ll need to determine whether your employees will be W2 or 1099, evaluate and purchase health insurance and benefits packages, draw up legal employee contracts, and recruit, vet, onboard and train employees. Most likely, you’ll also be responsible for purchasing necessary employee hardware, like laptops and monitors.

If you choose to outsource operations to a TAMP, you’ll need to evaluate TAMP providers to determine which is the best fit for your business. Once you sign your contract, you’ll work with your onboarding team to get up and running.

Implement Your RIA Tech Stack

Your business structure decision, in-house versus outsourced, will be instrumental in helping you determine the technology stack you need for your RIA firm.

If you’ll be handling operations internally, for RIAs includes: Portfolio Accounting System, Rebalancer, CRM System, Client Portal & Mobile App, Financial Planning Software, and Risk Profiling Software.

You may be able to find all or most of these functions on a single technology platform, which will certainly cut down on evaluation and implementation time. However, you’ll probably find that these providers tend to be the most costly, with a few standout features surrounded by several just-okay solutions.

If you choose to work with a TAMP, your partner should package all necessary technology, including the list above, into their service offering. It’s a red flag if your potential TAMP requires you to sign a contract with another tech provider.

Determine How to Handle Investment Management

For some RIAs, investment management is key to their unique value proposition. For others, providing financial guidance and advice and spending time with clients is a better use of their time. It’s likely you already know what your strengths are, so determining how to navigate investment management at your RIA firm comes down to answering these three questions:

●  Do you plan to utilize third-party models?

●  Do you want to build and manage your own model portfolios?

●  Do you want to leverage some combination of the two?

If you’ve already decided you’re going to work with a TAMP, keep in mind that not every provider is built to handle an advisor-managed investment approach.

Market Your RIA Firm

Starting an RIA firm requires a thoughtful marketing strategy that doesn’t simply rely on referrals from current clients. Follow these steps for attracting new prospects to your firm:

●  Determine your niche: The more narrow your niche, the more successful your marketing becomes. It sounds counterintuitive, but niching down can actually help you attract more clients, since it will be easier for you to craft marketing messages that speak directly to your audience, rather than addressing a generic market.

●  Establish your brand identity: This includes a logo, tagline and visual style, as well as any messages that reflect your firm’s values, philosophy and mission.

●  Build a website: Potential clients will look for you on the web first. Purchase a domain name, select a web hosting service, and hire a professional developer to create an informative website for you. Your website should include information about your services, your team and your investment philosophy, as well as your contact information.

●  Use social media: Establishing a presence on LinkedIn, Twitter, Facebook and other social channels can amplify your reach to your potential clients. Just keep in mind the SEC’s new marketing rule to ensure your social media interactions are compliant.

●  Work with Centers of Influence (COIs): Building relationships with financial professionals like accountants and attorneys can be a powerful marketing tool for RIAs.

For more RIA marketing resources, head over to our RIA Marketing Crash Course, which covers information like lead generation tactics, sales pipeline management, KPIs for marketing metrics, and how to get the most out of social media.

Choose the Right Partner

Choosing the right support system is critical to the success of your RIA firm. GeoWealth uses proprietary technology to power our Turnkey Asset Management Platform, keeping costs low for advisors just starting out.

What’s more, the team at GeoWealth has years of experience helping advisors build their own businesses, from our close partnerships with custodians, compliance consultants, lawyers and other tech providers to ongoing support from the very beginning of your transition.

Click here to get in touch with our team and explore about how we can support the launch of your RIA firm.

The information contained herein does not constitute investment advice or a solicitation to buy or sell any security, investment or product. You should not construe any of this information to be legal, tax, investment, financial, or other advice. This article is for dissemination of general information only. Information presented is believed to be factual and up-to-date, but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. Investments are not guaranteed and are subject to investment risk, including possible loss of the principal amount invested. Past performance is no guarantee of future results.


According to a recent industry study, 100% of advisors who made the decision to go independent would do it again. So if you’re considering transitioning from your broker-dealer or wirehouse to start your own RIA, chances are you’ll be glad you did.

While independence comes with a host of benefits – increased net worth, stronger client relationships, more freedom and flexibility – getting off the ground is a lot of work, with plenty of boxes to check before you’re ready to open your doors.

This guide covers all the essential steps of launching a new firm.

Starting a new RIA has the potential to be one of the most significant decisions you can make in your career. Breaking Away the Right Way is a blueprint on best practices for launching your new firm, presented in an easy-to-follow, phased approach across multiple areas:

  • Legal & Compliance
  • Insurance
  • Custodial Relationships
  • Business Structure
  • Tech Stack
  • Investment Management
GeoWealth is the TAMP for Modern RIAs 

If you’d like to learn more about how GeoWealth can help transform your business and enable you scale faster, reach out to our team. We’re happy to consult with you on your particular situation and answer any questions you may have about outsourcing your technology, investment management, or back office.

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