While many requirements to start an RIA are consistent across all states, there are instances where the details vary. This article will examine what it takes to become an RIA in Florida.
Who is required to register in the state of Florida?
Advisors with less than $100 million in AUM that live in Florida (more than $100 million will need to register with the SEC), have more than 5 clients in the state, or actively market their services will need to register as an RIA in the state.
Key Takeaways from this article:
As with most states, Florida requires advisors to meet the licensing requirements or designations: Series 65, Series 66 & Series 7 combined, or have CFP, CFA, CIC, CHFC, or PFS designation.
This state requires that each investment advisor representative submit form U-4 and ADV Part 2B.
Advisors must submit a balance sheet and income statement for their RIAs.
All payments are due at the time of registration.
Financial Statement Requirements
Financial advisors must submit a balance sheet and income statement for their RIAs.
Massachusetts requires RIAs with discretion to submit a security bond. Each IRA needs to submit form U-4 and ADV Part 2B.
Must pass Series 65, Series 66 & 7 combined or have the appropriate designation.
If you're registering in Florida, it's required that any advisor providing financial advice must acquire one of these licenses or designations::
Series 66 and 7 combined
Or have CFP, CFA, CIC, ChFC, or PFS designation
Forms & Policies required by Florida
All filing fees are due at registration
Apply for access to FINRA's WebCRD/IARD online system
Before continuing the registration process, advisors will need access to FINRA's WebCRD/IARD online system. FINRA will not regulate or supervise RIAs; Florida only uses the system to process the applications.
Form ADV 1 (online portion)
This part is completed online for your firm's registration. You'll include information about the business and ownership structure, any affiliations related to business practices, clients, and additional information about employees.
Since this is the online portion, it's also used for uploading Form ADV part 2A and Form ADV part 2B.
Form ADV 2A (paper and online) Form ADV Part 2A is your firm's brochure that details the RIA's services, fees, disciplinary disclosures, and other details. This brochure must be provided to all clients and prospects, and Florida requires it to be written in plain English.
Form ADV 2B (paper and online)
This portion of the ADV is also given to clients. Unlike 2A, this part is all about the advisor. It contains information about the advisor's employment, education, conflict of interest, and disciplinary information. Anyone else at the firm giving investment advice to clients, including Executive Officers, must also have a Form ADV 2B.
Client Advisory Contract
This contract, including an investment policy statement, must meet Florida's appropriate regulatory authority standards for client advisory contracts.
Policies and Procedures Manual
This manual is to help maintain and enforce the RIA's internal policies. It must also include how the firm handles client complaints, training new IARs, Business Continuity Plan, Anti-Insider Trading Policy, Anti-Money Laundering Policy, and Information Security Policy.
Advisors must provide this to clients at the start of the relationship and every year after that. This statement explains how the client's information is stored, handled, and disclosed. The policy will vary from RIA to RIA, but it must meet Florida's compliance requirements.
Code of Ethics
This document ensures that the advisor is meeting the standards the state sets.
As you begin to work through starting an RIA in Florida, our team put together this helpful launch kit to help guide you through the process. Download it now and get the information to launch your RIA successfully.
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Our dedicated customer support team is here to help advisors that are planning to make the leap from their wirehouse. Our team will help ensure a smooth transition with exceptional ongoing service.