In Kentucky, an advisor must follow specific guidelines to register their RIA. This article will share what those are so advisors can be prepared.
Advisors living in Kentucky, advising Kentucky residents, or soliciting their services in Kentucky must register with the state.
In case it seems overwhelming to do this on your own, you may consider hiring a compliance consultant.
Financial statement requirements for Kentucky:
Advisors 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.
To register an RIA, Individual Advisor Representatives (IARs) must pay all the filing fees and complete the following tasks and submissions with the state:
-
Submit FINRA Entitlement Paperwork
To be clear, FINRA doesn’t supervise or regulate RIAs, but Kentucky uses FINRA’s system to process registered investment advisor applications. Due to this, every IAR looking to start an RIA must apply for access to FINRA’s Web CRD/IARD online system to complete their registration process. -
Form ADV Part 1 (online portion)
Form ADV Part 1 is the online component of the ADV, and it’s all about the RIA only. In this part, the advisor will disclose all the information related to the firm, such as ownership, clients, business practices, disciplinary events related to the advisor or its employees, and any affiliations.
This is also used to upload ADV Part 2A and ADV Part 2B. -
Form ADV Part 2A (paper and online)
This is the RIA’s disclosure brochure. An advisor will share information about the RIA’s fees, services, disciplinary disclosures, and other details about the firm. The state requires this paper brochure to be written in easy-to-read English and given to all prospective and current clients. -
Form ADV Part 2B (paper and online)
This is also a brochure that most times are given to clients. Form ADV Part 2B will have details about an advisor’s education, employment history, potential conflicts of interest, and any disciplinary actions. It should also be noted that any Executive Officers or representatives who advise clients must complete this form.
-
Client Advisory Contract
Kentucky requires this filing to ensure the RIA follows the regulatory authority standards for client advisory contracts. -
Code of Ethics
This filing is required to show the state that the RIA aligns with the fiduciary standards required by Kentucky. -
Privacy Policy Statement
In the Privacy Policy Statement, the firm must share how they handle, store, and share client information. This must be given to clients at the start of the working relationship and every year after that.
Every Privacy Policy Statement will be unique to its RIA, but it still must meet the state of Kentucky compliance requirements. -
Policies and Procedures Manual
This is the supervisory document the RIA will use to maintain and uphold the firm’s internal processes across the business. All procedures must be included, from how the RIA handles client complaints to how it trains new IARs. It must also have information on Anti-Insider Trading plans, Business Continuity, Anti-Money Laundering, and Information Security.
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.
