Advisors must meet specific requirements and guidelines to start an RIA in South Carolina. In this article, we’ll cover what you need to know.
If an advisor meets the following criteria, they must register their RIA with the state of South Carolina: The RIA is located in the state, the advisor manages less than $100 million in AUM, they solicit their financial services in the state, or are managing assets for more than five South Carolina state residents.
Consider hiring a compliance consultant to help you properly set up your RIA in South Carolina.
South Carolina 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 with the state:
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Submit FINRA Entitlement Paperwork
To submit your application, you must apply for an account to FINRA’s WebCRD/IARD online system. The state uses the system to process applications (FINRA doesn’t regulate or supervise RIAs). -
Form ADV Part 1 (online only)
This online portion contains information about the RIA, such as ownership, clients, business practices, disciplinary events related to the advisor or its employees, and any affiliations. Form ADV Part 1 is also used to upload ADV Part 2A and ADV Part 2B. -
Form ADV Part 2A (paper and online)
Information about the RIA’s fees, services, disciplinary disclosures, and other information related to the firm is found in Form ADV Part 2A. This document also serves as the Firm’s Disclosure Brochure, and the state requires it to be given to prospective and current clients and be written in plain, understandable English. -
Form ADV Part 2B (paper and online)
Information about the advisor will be provided in Form ADV Part 2B, such as education, employment history, potential conflicts of interest, and any disciplinary actions. Also, any Executive Officers or representatives who advise clients must complete this form.
This is also considered a brochure given to clients.
If sponsoring a wrap fee program, Appendix 1 is also required. -
Form U4
Form U4 registers your firm’s Investment Advisor Representative (IARs).
If you’re seeking approval as a state RIA for the first time, you will need to complete the following:
- E-billing establishment & processing
- SAA Creation & FINRA Entitlement
- IARD/CRD Access & Authentication
South Carolina may also require the following documents and processes:
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Client Advisory Contract
This filing ensures the RIA meets the regulatory standards for client advisory set by South Carolina. -
Privacy Policy Statement
The RIA’s Privacy Policy Statement must be given to all clients at the start of the working relationship and every year after that. It must explain how the firm handles, stores, and discloses client information. The Privacy Policy will be unique to each RIA, but it must meet the state of South Carolina’s compliance requirements. -
Policies and Procedures Manual
This is an internal guide for RIAs to uphold internal processes and procedures. Within this manual, there must be information on how the RIA handles client complaints to how it trains new IARs. Also included is information about Business Continuity, Anti-Money Laundering, Information Security, and Anti-Insider Trading plans. -
Code of Ethics
South Carolina requires that RIA’s meet specific fiduciary standards, and this filing will ensure that’s happening.
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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.
