Advisors must meet specific requirements and guidelines to start an RIA in Rhode Island. This article will explore what those are.
If you meet the following criteria, you must register your RIA with the state of Rhode Island:
- Your RIA is located in Rhode Island
- You solicit your financial services in Rhode Island
- You manage less than $100 million in AUM
- You manage more than five state residents
To help ensure the proper setup of your RIA, consider hiring a compliance consultant to help guide you.
Rhode Island requires that advisors 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 Rhode Island:
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Submit FINRA Entitlement Paperwork
To register with the state, you must apply for an account to FINRA’s Web CRD/IARD online system. FINRA doesn’t supervise or regulate RIA’s, but the state uses the system to process applications. -
Form ADV Part 1 (online only)
You will disclose information about the RIA’s ownership, clients, business practices, disciplinary events related to the advisor or its employees, and any affiliations. Since Form ADV Part 1 is the online portion of the application, it’s used to upload ADV Part 2A and ADV Part 2B. -
Form ADV Part 2A (paper and online)
In this portion, you will describe the RIA’s fees, services, disciplinary disclosures, and other information related to the firm. Form ADV Part 2A also acts as the Firm’s Disclosure Brochure, and Rhode Island requires this to be given to prospective and current clients. It must be in plain, simple English that’s easy to understand by prospects and clients. -
Form ADV Part 2B (paper and online)
In Form ADV Part 2B, you will share information about yourself: education, employment history, potential conflicts of interest, and any disciplinary actions. It’s also required that any Executive Officers or representatives that advise clients complete this form. Since this is also a brochure, it must be written in plain English so prospects and clients can understand.
If sponsoring a wrap fee program, Appendix 1 is also required. -
Form U4
Form U4 is used to register the firm’s Investment Advisor Representative (IARs). -
Client Advisory Contract
The state has set regulatory standards for client advisory. The RIA must submit the Client Advisory Contract to show that it follows the requirements.
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Financial & Bonding requirements
According to the NASAA website, Rhode Island requires the following: All RIAs must prepare and retain financial statements indicating solvency and a positive net worth for a period of not less than five years and make those financial statements available to the Director within 72 hours of any verbal or written request (Rule 209(c)). An RIA licensed with the Division must have a minimum net worth of $5,000 (Rule 209(a)-1.D.). An RIA with custody must have a minimum net worth of $25,000 and a surety bond set by order of the director in an amount ranging from $100,000 to $1 million for the adviser and between $10,000 and $100,000 for each associated IAR (Rule 215 (b)-1). RIAs with custody must comply with Rule 206(4)-2 under the Investment Advisers Act of 1940, the provisions of the Rhode Island Uniform Securities Act, and all relevant rules promulgated thereunder.
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 Rhode Island may also require the following:
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Policies and Procedures Manual
This manual will serve as your RIA’s internal guide to uphold processes and procedures. It must include information about how your RIA trains new IARs to how it handles client complaints. It should also have information about Business Continuity Plans, Anti-Money Laundering, Information Security, and Anti-Insider Trading Plans. -
Privacy Policy Statement
Your Privacy Policy Statement will be unique to your firm but must meet the state’s compliance requirements. It must explicitly state how the RIA handles, stores, and discloses client information. You must also give this to clients at the start of the working relationship and every year after that. -
Code of Ethics
Rhode Island has specific fiduciary standards, and this filing ensures your RIA meets those requirements.
Starting an RIA doesn’t have to be overwhelming with the right resources, such as our comprehensive RIA launch kit.
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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.
