If you’re an advisor looking to launch an RIA, it’s essential to understand that the requirements for doing so can vary significantly by state. This article will delve into the specific requirements for Washington state.
Who is required to register as an RIA in Washington?
Investment advisors living in Washington, managing less than $100 million in AUM, have 5+ clients, or actively marketing their services in the state must register.
If managing over $100 million in AUM, the advisor may consider registering with the SEC.
Key Takeaways from this article:
- Hiring a compliance consultant is advisable rather than trying to navigate the process independently. If that’s not an option, this article provides a list of required documents for financial advisors seeking to register in Washington.
- To register in Washington, advisors must possess one of the following professional designations: Series 65, Series 66 and Series 7, CFP, CFA, CIC, ChFC, or PFS.
Financial statement requirements for RIAs in Washington:
Every RIA firm must submit a balance sheet and the Washington Fiscal Year End Report. Also, every IAR must submit the Form U4 and ADV Part 2B.
Advisors must 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.
Policy and Form requirements:
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
Just to be clear, the Financial Industry Regulatory Authority (FINRA) doesn’t regulate or supervise RIAs. Washington only utilizes FINRA’s WebCRD/IARD system to process applications. - Form ADV Part 1 (online portion)
This part of the ADV contains information about the RIA only (individual information is disclosed in Form U4 and ADV Part 2B). This form is the online portion of the registration process, and it’s used to upload ADV Part 2A and ADV Part 2B. - Form ADV Part 2A (paper and online)
This is your RIA’s brochure. It includes fees, services, disciplinary disclosures, and any other essential details about the firm. This brochure should be given to all prospects and clients. Washington requires that it’s easy to understand, so it should be drafted in plain English. - Form ADV Part 2B (paper and online)
This is another paper brochure given to clients. Unlike part 2A, this brochure details information about the Investment Advisor Representative (IAR). Details include your employment history, educational background, disciplinary information, and any conflicts of interest.
Also, remember that anyone giving investment advice to clients (including Executive Officers) must have a Form ADV Part 2B. - Code of Ethics
This ensures that you and your firm meet the state's standards.
- Privacy policy statement
This statement must explain how the firm keeps, handles, and discloses client information. It can be built to the firm’s specifications but must meet the state’s compliance requirements. Firms must give the Privacy Policy Statement to clients at the start of the relationship and yearly after that. - Client Advisor Contract
This must meet the regulatory authority standards for client advisory contracts in Washington. It must also include investment policy statements. - Policies and Procedures Manual
This manual will provide guidance on how to manage and follow procedures related to client complaints and training new IARs. It should also include details on Anti-insider Trading, Business Continuity, Information Security, and Anti-Money Laundering Policies.
In Washington, registering as an RIA requires meeting financial statement requirements, obtaining professional designations, and submitting forms and documents. Starting your own RIA can be daunting, but it's worth it, and there are resources to help. Our team has developed this comprehensive RIA launch kit to help you get started.
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 planning to 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 advisor advocates today.
*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.
