Starting an RIA varies from state to state, so knowing the state-specific requirements is crucial. In this article, we’ll go through the requirements specific to Iowa.
Who is required to register in the state of Iowa?
Advisors soliciting their services in the state, have more than five clients, manage less than $100 million in AUM, or live in Iowa must register their RIA with the state.
If managing over $100 million in AUM, consider registering with the SEC.
Consider hiring a compliance consultant to help make this process easier for you.
Financial statement requirements:
Advisors in Iowa must have one of the following professional designations to operate in the state: Series 65, Series 66 and Series 7, CFP, CFA, CIC, ChFC, or PFS.
Iowa also requires advisors to submit the form U-4 and ADV part 2B.
Form and policy requirements for starting an RIA in Iowa:
In addition to paying all the state’s registration filing fees, advisors must complete the following:
- Apply for an account to FINRA’s WebCRD/IARD
Even though FINRA doesn’t oversee or regulate RIAs, the state of Iowa uses FINRA’s system to process RIA applications. Therefore, investment advisors must apply for access to FINRA’s WebCRD/IARD online platform.
- Form ADV Part 1 (online portion)
This part of the ADV will have information about the RIA and is the online component of the firm’s registration documentation. Form ADV Part 1 also serves the purpose of uploading ADV Part 2A and ADV Part 2B.
- Form ADV Part 2A (paper and online)
Form ADV Part 2A has information regarding your RIA and is considered the firm’s brochure. This brochure includes the firm’s fees, services offered, disclosures of disciplinary actions, and other relevant details. This must be provided to all clients and prospects and written in plain, simple English.
- Form ADV Part 2B (paper and online)
This is another brochure that must be given to clients by Investment Advisor Representatives (IARs). It will have details about their educational background, work history, possible conflicts of interest, and any disciplinary actions taken against them. Executive Officers who offer investment advice and representatives who advise clients must also complete this form.
- Code of Ethics
This filing ensures that your RIA is adhering to the standards set by the State of Iowa.
- Client Advisory Contract
The client advisory contract must abide by the standards set by the regulatory authority in Iowa. It must also encompass the investment policy statement.
This statement must be provided to clients at the start of their relationship and annually. In this statement, an advisor will outline how the firm handles, stores, and shares client information. It is customized to the firm's specific needs but must comply with regulations established by Iowa.
- Policy and Procedures Manual
The Policies and Procedures Manual will detail the firm’s internal processes, such as handling customer grievances and training new Investment Advisor Representatives (IARs). It encompasses Business Continuity, Anti-Money Laundering, Information Security, and Anti-Insider Trading plans.
To summarize, registering in Iowa requires meeting financial statement requirements, obtaining specific professional designations, and submitting required forms and documents. Starting an RIA doesn’t have to be overwhelming with the right resources, such as our comprehensive RIA launch kit.
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.