When starting an RIA, it's important to know the different requirements for each state. This article will look at the specific requirements for the state of Minnesota.
Who is required to register as an RIA in Minnesota?
Advisors who live in Minnesota with fewer than 100 million in AUM, have five or more clients, or actively soliciting their services in Minnesota must register as an RIA..
Statement requirements for RIAs in Minnesota:
To register in the state, 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. Also, every advisor has to submit form U-4 and ADV part 2B.
You'll also have to fill out a form called the U-4 and the ADV Part 2B.
Policy and Form requirements for starting an RIA in Minnesota:
Filing with Finra
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
The state uses FINRA’s WecCRD/IARD online system to process applications, so advisors must apply for an account. Finra does not regulate or supervise RIAs.
- Form ADV Part 1 (online portion)
This section of the ADV has information about the RIA only. Personnel details are provided in Form U4 and ADV Part 2B. This form is the online component of the registration process, and it’s also used for uploading ADV Part 2A and ADV Part 2B.
- Form ADV Part 2A (paper and online)
Form ADV Part 2A serves as your RIA’s brochure. It includes information about fees, services, disciplinary disclosures, and other pertinent details. It’s required that all prospective and current clients receive this from your RIA. As with many other states, Minnesota needs this written in clear and easily understandable language.
- Form ADV Part 2B (paper and online)
This is another brochure given to clients. In this brochure, advisors will include information on their education, employment, potential conflicts of interest, and disciplinary actions. Executive Officers who provide investment advice to clients and representatives who advise clients must complete this form too.
- Code of Ethics
Filing a Code of Ethics ensures that your firm adheres to the standards set by the State of Minnesota.
- Client Advisory Contract
This contract must meet the appropriate regulatory authority standards for client advisory contracts imposed by Minnesota. It must also include the investment policy statement.
- Policies and Procedures Manual
This outlines your firm's internal procedures, including dealing with customer complaints and training new IARs. It also includes Information Security, Business Continuity, Anti-money Laundering, and Anti-insider Trading Plans.
To become an RIA in Minnesota, compliance with financial statement requirements, obtaining specific professional designations, and submitting necessary forms and documents are required. While starting an RIA may seem intimidating, it can be fulfilling, and resources are available to aid in the process. Our team has also created an RIA launch kit to assist in getting started.
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.