Advisors looking to start their RIA in New Mexico must follow specific requirements. Learn more about these requirements in this article.
Do you need to register your RIA in the state of New Mexico? You must if you meet the following criteria:
- You manage less than $100 million in AUM
- You solicit your financial services in the state
- The RIA is in New Mexico
- You manage more than five state residents
If you’re unsure how to set up your RIA properly, consider hiring a compliance consultant to help guide you through the process.
New Mexico requires advisors to have one of the following professional designations: Series 65, Series 6 or 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 New Mexico:
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Submit FINRA Entitlement Paperwork
The state requires IAs to register for an account to FINRA’s Web CRD/IARD system. New Mexico uses its system to process applications, but FINRA doesn’t regulate or supervise RIAs. -
Form ADV Part 1 (online only)
Advisors will disclose information about the RIA’s ownership, clients, business practices, disciplinary events related to the advisor or its employees, and any affiliations in Form ADV Part 1. Since this is the online portion, Form ADV Part 1 is used to upload ADV Part 2A and ADV Part 2B. -
Form ADV Part 2A (paper and online)
Advisors will describe the RIA’s fees, services, disciplinary disclosures, and other information related to the firm in Form ADV Part 2A. This is also known as your firm’s Disclosure Brochure, and it’s given to prospective and current clients. The state of New Mexico requires this to be written in simple English that’s easy to understand. -
Form ADV Part 2B (paper and online)
In Form ADV Part 2B, advisors will share information about themselves, such as educational background, employment history, potential conflicts of interest, and any disciplinary actions. Other Executive Officers or representatives must also complete this form if they advise clients.
Form ADV Part 2B is also a brochure given to clients–it must be in plain English that’s easy to understand.
If sponsoring a wrap fee program, Appendix 1 is also required. -
Form U4
You will use Form U4 to register Investment Advisor Representative (IARs). New Mexico requires applicants to provide names & CRD numbers for the designated principal(s) for each office (who must hold the Series 24), and a list of all IARs and their completed U4s. -
Client Advisory Contract
New Mexico has set regulatory standards for client advisory, and this submission proves the RIA is compliant with those standards.
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Financial & Bonding requirements
Investment Advisers that will not have custody of customers’ funds or securities may submit unaudited statements (dated no more than ninety (90) days before the filing date). The filing date is the date the Division receives the registration package.
Investment Advisers that have custody of customers’ funds or securities must provide a Securities Licensee’s Blanket Bond (New Mexico Form BF-2). You can find the form here.
RIAs must maintain a minimum net worth of $5,000. If the RIA will have discretionary authority, the minimum net worth requirement is $10,000.
If you’re seeking approval as a state RIA for the first time, you will need to complete the following:
- SAA Creation & FINRA Entitlement
- IARD/CRD Access & Authentication
- E-billing establishment & processing
The state of New Mexico may also require the following:
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Policies and Procedures Manual
The firm's Policies and Procedures manual is the primary reference for overseeing all facets of your business operations, from addressing client complaints to training new IARs. This manual also encompasses other critical policies of the firm, such as Business Continuity Plans, Anti-Money Laundering, Information Security, and Anti-Insider Trading Plans. -
Privacy Policy Statement
At the start of your client relationship, you must provide them with the Privacy Policy annually afterward. This policy outlines how the firm manages, protects, and shares client data. It is tailored to your firm's needs and aligns with the compliance standards of the State of New Mexico. -
Code of Ethics
The state has set fiduciary standards that RIAs must meet. This filing confirms those standards are met.
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.
