Depending on your state, the requirement for starting an RIA will vary. This article will cover the criteria specific to North Dakota.
Who is required to register in the state of North Dakota?
Advisors soliciting their services in the state, have more than five clients, manage less than $100 million in AUM, or live in North Dakota must register their RIA with the state.
Hiring a compliance consultant can make navigating this process easier, but if not, this article will provide you with the necessary guidance.
Financial statement requirements:
North Dakota requires RIAs to have a balance sheet and submit an income statement.
Advisors in North Dakota must also 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.
North Dakota also requires advisors to submit the Form U-4 and ADV part 2B.
Form and policy requirements for starting an RIA in North Dakota:
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
FINRA does not oversee or regulate RIAs. The state only uses FINRA's system to process RIA applications, so investment advisors must apply for access to FINRA's WebCRD/IARD online platform.
- Form ADV Part 1 (online portion)
Information about the RIA is found in this section of the ADV, and is the online component of your firm’s registration documentation. Form ADV Part 1 also serves the purpose of uploading ADV Part 2A and ADV Part 2B. Personal details are submitted in Form U4 and ADV Part 2B. - Form ADV Part 2A (paper and online)
Form ADV Part 2A contains information about the RIA and is considered the firm’s brochure. The firm’s fees, services offered, disclosures of disciplinary actions, and other relevant details are included. This brochure must be provided to all clients and prospects and written in plain, simple English. -
Form ADV Part 2B (paper and online)
Form ADV 2B must also be given to clients by Investment Advisor Representatives. It contains details about their educational background, work history, possible conflicts of interest, and any disciplinary actions taken against them. Most often, executive Officers who offer investment advice and representatives who advise clients must also complete this form. -
Code of Ethics
This filing ensures that your RIA adheres to the State of North Dakota standards. -
Privacy Policy Statement
The Privacy Policy Statement is given to clients at the start of their relationship and annually. In this statement, an advisor will outline how the firm handles, stores, and shares client information. It is customized to the firm's specific needs but must comply with regulations established by the state.
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Policy and Procedures Manual
This manual details the firm’s internal processes, such as handling customer grievances to training new Investment Advisor Representatives (IARs). It encompasses Business Continuity, Anti-Money Laundering, Information Security, and Anti-Insider Trading plans. -
Client Advisory Contract
The client advisory contract must abide by the standards set by the regulatory authority in North Dakota. It must also encompass the investment policy statement.
While registering as an RIA in North Dakota has specific requirements, it doesn’t have to be overwhelming. Our team has put together a comprehensive RIA launch kit to help you on your journey.
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.
