Part of starting an RIA requires registering within the state(s) where you provide financial services. Most state requirements are the same, but occasionally they will vary state by state. In this article, we’ll look at the state requirements for New York.
As an investment advisor, if you meet one of the following requirements, then you must register with New York:
If you manage more than 5 clients who are residents of New York
New York uses FINRA’s WebCRD/IARD system to process applications.
We highly recommend hiring a compliance consultant to help you with this process. If that's not an available option, keep reading and find out what you need to provide to the state of New York.
Financial statement requirements:
New York requires RIAs to submit a balance sheet and income statements to register in the state.
New York requires RIAs to submit a balance sheet and income statements to register in the state..
Registration requirements for Advisors
New York doesn’t require advisors to submit form U-4 but does require New York Form-IAQ to be filed with the state.
Advisors must pass Series 65, or Series 66 & 7 combined. Or, they must obtain the appropriate designation: CFP, CFA, CIC, ChFC, or PFS designation.
Forms & Policies required by New York
Payment of all State of California registration filing fees
Unlike other states, New York requires registered investment advisors to pay an annual registration fee for the RIA and each registered individual with the RIA. These fees must be paid at the time of registration.
FINRA Entitlement paperwork
To file a registered investment adviser application with the state of New York, advisors must apply to FINRA for an account to FINRA’s WebCRD/IARD online system. While FINRA doesn’t regulate or supervise RIAs, New York uses FINRA’s WebCRD/IARD system to process applications.
Form ADV Part 1 (online)
In this portion of the ADV, RIAs will disclose information about how they conduct business. The information includes details about the advisor's business and ownership structure and any affiliations related to business practices, clients, and additional information about employees.
Part 1 is also used to upload ADV Part 2A and Part 2B.
Form ADV Part 2A & Part 2B (paper and online)
This portion of the ADV is your RIA’s brochure. In this brochure, you will disclose your services, fees you charge, disciplinary disclosures, and additional details of your RIA. Advisors should also include employment history, education, conflicts of interest, and disciplinary information.
Both of these brochures are given to your clients: prospective and current. As with other states, New York also requires that this portion of the ADV be written in plain English so that clients can easily read and understand it.
Policies and Procedures Manual
For your Policies and Procedures Manual, you must include your RIA’s internal policies on all parts of your business. From handling clients’ complaints to training new advisors to join your firm–every policy and procedure you practice at your RIA must be included and explained in this manual.
Additionally, you will need to include your RIA’s Information Technology Policy, Anti-insider Trading Policy, Business Continuity Plan, and Anti-money Laundering Policy.
Client Advisory Contract
In this contract, you will detail the relationship your RIA will have with your clients. This contract is also required to meet the regulatory authority standards for client advisory contracts in New York.
Code of Ethics
The state requires this to ensure you meet the State of New York standards.
Your policy should be tailored to your RIA’s specifications and must meet the State of New York’s compliance requirements.
Starting your own RIA and figuring out where to register and when can be overwhelming, but with the right resources, you can do it successfully. Check out our team's helpful RIA launch kit to learn more.