How you register your RIA will vary from state to state. This article will list the requirements to start an RIA in Illinois.
Who is required to register in the state of Illinois?
- Any advisor that solicits their business in the state,
- Manages $100 million in AUM or less in Illinois.
You may also have to register with the SEC if you manage more than $100 million in AUM.
If you need more guidance, we’re here to help you navigate the path to starting your RIA:
- Planning a transition? Our team of experts is here to assist; schedule a call today.
- Still Deciding? Access our in-depth RIA Launch Kit that covers everything you need to know to start your RIA.
- Hiring a compliance consultant to file registrations will save you time and energy, plus you’ll avoid any clerical errors. If hiring a compliance consultant is not possible, this article goes over the financial statement and document requirements an advisor must provide when registering.
Must pass Series 65, Series 66 & 7 combined or have the appropriate designation.
Any advisor who wants to provide financial advice must acquire one of these licenses or designations:
- Series 65
- Series 66 and 7 combined
- Or have CFP, CFA, CIC, ChFC, or PFS designation
- Payment of all registration filing fees are due to the state
- Get access to FINRA's WebCRD/IARD online system
Like the other states we've covered, Illinois also requires advisors to apply to FINRA to gain access to their WebCRD/IARD online system. While FINRA does not regulate or supervise RIAs, Illinois uses FINRA's system to process applications.
- Balance Sheet (unaudited)
A copy of a balance sheet dated no more than 60 days prior to the date of application filing is also required. The balance sheet must include an affirmation the information contained is true and correct, and if the RIA will have custody of client cash or securities or accepts prepayment of fees. This statement must be signed by an officer, general partner or the sole proprietor.
- Business Formation Documents
Copies of articles of incorporation, partnership agreement or articles of organization depending on your firm’s business structure, and any amendments.
- Information and Attestations:
Illinois also requires RIAs to file certain information and attestations regarding its activities and affiliated persons according to Administrative Code Section 130.840.
- Form ADV Part 1 (online portion)
This portion of the ADV is the online component that consists primarily of information about the RIA. The information to include in this are related to 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 ADV part 2A and part 2B.
- Form ADV Part 2A (paper and online)
This part of the brochure lists the firm's services, fees, disciplinary disclosures, and other details about the firm. This brochure must be provided to all clients and prospects.
Illinois requires advisors to write Form ADV 2A in plain English so that clients and prospects easily understand it.
- Form ADV Part 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.
Also, anyone else at the firm giving investment advice to clients, including Executive Officers, must have a Form ADV 2B.
- Client Advisory Contract
This contract is between an advisor and their clients. This also needs to include an investment policy statement and must meet the appropriate regulatory authority standards for client advisory contracts in Illinois.
- Policies and Procedures Manual
The purpose of this manual is to help maintain and enforce the firm's internal policies. This manual 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.
- Code of Ethics
This document ensures that the advisor meets the standards the state sets.
Setting up an RIA does require many boxes to be checked, and it might seem overwhelming without the proper guidance. That’s why our team put together this helpful launch kit– it’s everything you need to successfully launch your own RIA.
At Altruist, we strive to make independent financial advice better, more accessible, and more affordable. Our platform gives back precious time and capital to RIAs, so you can focus on what matters most: your clients and business.
On one intuitive, integrated platform, advisors can open and fund accounts, trade and rebalance, report, and bill, at a fraction of today’s edging-ever-higher technology costs.
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.
To see how we’re helping RIAs streamline operations, reduce overhead, and elevate the client experience, book a call with one of our transitional specialists now.
*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.