Starting an RIA in Louisiana requires advisors to meet specific guidelines. This article will explore what those are.
Advisors who meet the following criteria must register their RIA with the state of Louisiana:
- The RIA is in Louisiana
- You manage less than $100 million in AUM
- You solicit your financial services in the state
- You manage more than five state residents
If you need assistance setting up your RIA correctly, consider hiring a compliance consultant.
Louisiana requires advisors to have one of the following professional designations: Series 65, Series 7 & 66, CFP, CFA, CIC, ChFC, or PFS.
In addition to paying all the registration and filing fees, IARs must complete the following tasks and submissions in Louisiana:
Submit FINRA Entitlement PaperworkTo register an RIA with Louisiana, advisors must register for an account to FINRA’s Web CRD/IARD system. Louisiana uses FINRA’s system to process the applications, but FINRA doesn’t regulate or supervise RIAs.
Form ADV Part 1 (online only)Form ADV Part 1 provides information about the ownership, clients, business practices, disciplinary events, and affiliations of the RIA. It includes details about the advisor or its employees' involvement in disciplinary events. Advisors also utilize it to upload ADV Part 2A and ADV Part 2B.
Form ADV Part 2A (paper and online)Form ADV Part 2A lists the firm's fees, services, disciplinary disclosures, and other information related to the firm. Form ADV Part 2A is the firm's Disclosure Brochure for prospective and current clients.
The state requires this brochure to be written in simple English that's easy to understand.
Form ADV Part 2B (paper and online)Form ADV Part 2B is another brochure for prospective and current clients. Advisors must also write it in plain English, that’s easy to understand. In this brochure, advisors will disclose their educational background, employment history, potential conflicts of interest, and any disciplinary actions. If there are any Executive Officers or representatives who advise clients, they must also complete this form.
If sponsoring a wrap fee program, Appendix 1 is also required.
Form U4Advisors will use Form U4 to register Investment Advisor Representatives (IARs).
Client Advisory ContractThe state has set regulatory standards for client advisory. Filing this proves the RIA is compliant with those standards.
Financial & Bonding requirementsAdvisors must give the state an income statement and balance sheet (as of within 90 days before filing and prepared in accordance with GAAP standards). The balance sheet does not need to be certified by an independent public accountant.
If you’re seeking approval as a state RIA for the first time, you will need to complete the following:
- IARD/CRD Access & Authentication
- SAA Creation & FINRA Entitlement
- E-billing establishment & processing
Additional documents that Louisiana may require:
Policies and Procedures ManualThe manual is a guide for the company's operations, including dealing with complaints and training new employees. It will also provide information on important policies like Business Continuity Plans, Anti-Money Laundering, Information Security, and Anti-Insider Trading Plans.
Code of EthicsThis filing confirms the RIA is meeting the state’s fiduciary standards.
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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.