New Year, New Clients

It’s a new year and as you go forth and grow your book of business, let’s make sure you’re registered in the proper states

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As you charge ahead in the new year, you should be mindful that where your clients are based may either trigger registration or notice filing obligations with local state securities divisions. Registration obligations apply to state registered advisers, while SEC registered advisers will make notice filings. Keep in mind that if you are a state registered adviser with less than $100 million in regulatory assets under management, but are now required to register in 15 or more states then you may ditch those onerous state registrations and register with the SEC as a multi-state adviser.

In general, you will need to register or notice file within a state if:

  • The firm has a physical presence in the state;

  • The firm has more than 5 clients that are residents of that state; or

  • The firm is actively soliciting in the state.

That being said, there are four states that require notice filing at the time you obtain even one client:

  • Texas;

  • Louisiana;

  • Nebraska; and

  • New Hampshire

Similarly, for state registered advisers, there are two states that do not have the 5 or more client de minimus exemption:

  • Texas (although this is a truncated registration process they refer to as a "notice filing"); and

  • Louisiana

Firms must pay annual filing fees in any state that they are registered or notice filed in. This is typically handled within the Investment Adviser Registration Depository ("IARD") portal during the Form ADV annual updating amendment process, so be sure that you’ve calculated the requisite filing fees that will apply to you and have properly funded your IARD account heading into this Form ADV filing season.

2 min readmilan