To start an RIA in Connecticut, an advisor must follow specific requirements and guidelines enforced by the state. This article will cover what you need to know.
In Connecticut, if an advisor meets the following criteria, they must register their RIA with the state.
- The RIA is located in the state
- The advisor manages less than $100 million in AUM
- They solicit their financial services in the state
- Manage assets for more than five Connecticut state residents
Hiring a compliance consultant can help you properly set up your RIA in Connecticut.
Connecticut requires that advisors have one of the following professional designations: Series 65, Series 7 & 63, CFP, CFA, CIC, ChFC, or PFS.
In addition to paying all the registration and filing fees, IARs must complete the following tasks and submissions with the state:
- Submit FINRA Entitlement Paperwork
Advisors must apply for an account to FINRA’s WebCRD/IARD online system. While FINRA doesn’t regulate or supervise RIAs, the state uses its system to process applications. - Form ADV Part 1 (online only)
Form ADV Part 1 contains information about the RIA, such as ownership, business practices, clients, disciplinary events related to the advisor or its employees, and any affiliations. Advisors will also use Form ADV Part 1 to upload ADV Part 2A and ADV Part 2B. - Form ADV Part 2A (paper and online)
Form ADV Part 2A is known as the Firm’s Disclosure Brochure. It contains information about the RIA’s fees, services, disciplinary disclosures, and other information related to the firm. The state requires it to be given to prospective and current clients and must be written in plain, understandable English. - Form ADV Part 2B (paper and online)
Information about the advisor will be provided in Form ADV Part 2B, such as education, employment history, potential conflicts of interest, and any disciplinary actions. Also, any Executive Officers or representatives who advise clients must complete this form.
If sponsoring a wrap fee program, Appendix 1 is also required. - Form U4
Form U4 registers your firm’s Investment Advisor Representative (IARs).
For advisors seeking approval as a state RIA for the first time, you will need to complete the following:
- E-billing establishment & processing
- IARD/CRD Access & Authentication
- SAA Creation & FINRA Entitlement
The state of Connecticut may also require the following documents and processes:
- Client Advisory Contract
Connecticut requires that RIAs meet the regulatory standards for client advisory, and this filing will ensure that. - Privacy Policy Statement
RIAs must provide clients with the Privacy Policy Statement at the start of the working relationship and every year after that. The Privacy Policy Statement must share how the firm handles, stores, and discloses client information. The Privacy Policy will be unique to each RIA, but it must meet the state of Connecticut’s compliance requirements. - Policies and Procedures Manual
The Policies and Procedures Manual serves as the internal guide to uphold internal processes and procedures up. Within this document, there must be information on how the RIA handles client complaints to how it trains new IARs. Also included is information about Business Continuity, Anti-Money Laundering, Information Security, and Anti-Insider Trading plans. - Code of Ethics
Connecticut requires that RIA’s meet specific fiduciary standards, and this filing will ensure that’s happening.
Starting an RIA doesn’t have to be overwhelming with the right resources, such as our comprehensive RIA launch kit.
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*Altruist and its affiliates do not provide legal advice, so it’s important to check with a qualified professional for each state’s registration requirements.
