To start an RIA, you register the firm (with your state, in most cases, because SEC registration generally starts at $100 million of assets under management), file Form ADV, qualify each advisor with the Series 65 or a designation waiver, pick a custodian if you’ll manage assets, write a compliance program, and plan for a slow first year. The hard costs are modest. Michael Kitces described a typical launch as “less than $10,000 in the first year”, and XYPN’s registration packages cost $3,500 to $10,250. The bigger cost is time: in XYPN’s data, firms that start from scratch typically earn about $5,000 in year one and $100,000 to $130,000 by year three.
State or SEC registration
The dividing line is regulatory assets under management, the figure you report in Form ADV Item 5.F.
| Your situation | Where you register |
|---|---|
| Under $100 million | Your home state, in most cases |
| $100 million to $110 million | You may register with the SEC |
| $110 million or more | You must apply to the SEC |
| Already SEC-registered and above $90 million | You may stay with the SEC |
| New firm expecting $100 million within 120 days | You may register with the SEC |
There are exceptions. A mid-sized firm ($25 million to $100 million) based in New York registers with the SEC, because, in SEC staff’s words, New York is the only state where such a firm isn’t “subject to examination” by the state. A firm that would have to register in 15 or more states may register with the SEC instead. So may an internet adviser, but only one that gives all its advice through an interactive website.
Clients in other states don’t always mean more registrations. Under the national de minimis standard in the Advisers Act, a state can’t require you to register if you have no place of business there and fewer than six clients who live there in the past 12 months. Above that, each state wants its own filing, which matters for a virtual firm with a national niche.
Form ADV and your own qualification
The firm registers by filing Form ADV through the IARD system: Part 1A (the facts regulators read), Part 2A (the brochure clients read) and a Part 2B brochure supplement for each advisor. SEC-registered firms with retail clients also file Form CRS, the relationship summary, and must post it prominently on their website.
Each advisor needs to qualify as an investment adviser representative. The Series 65 has 130 scored questions in 180 minutes, takes 92 correct answers to pass, and costs $187. A current CFP, ChFC, CFA, PFS or CIMA waives it in states that have adopted NASAA’s updated rule. If you’re coming from a broker-dealer, see how to become a fee-only advisor for dropping your broker registration and handling trails.
Registration fees are small:
- SEC: $40 for an initial Form ADV filing under $25 million of assets, $150 from $25 million to $100 million.
- State IARD system fees: waived for state-registered firms through 2027, NASAA announced in September 2026; $15 to set up each representative and $15 a year.
- State fees (examples): Texas charges $75 for a firm application and $35 per representative. Florida charges $200 for the firm and $50 per representative, each renewed yearly. California charges $125 for an adviser application.
State-registered firms also face financial requirements. Under NASAA’s model rule, a firm with custody of client assets must keep at least $35,000 of net worth, one with discretion but no custody $10,000, and one that takes more than $500 per client six or more months in advance must stay positive. A bond can cover a shortfall. Custody that comes only from deducting your fees directly, with the required safeguards, doesn’t trigger the rule. States set their own versions, so check yours.
The compliance program
For an SEC-registered firm, Rule 206(4)-7 requires written policies and procedures “reasonably designed to prevent violation” of the rules, a review “no less frequently than annually,” and a named chief compliance officer, which in a solo firm is you. Rule 204A-1 requires a written code of ethics, with holdings reports from each access person. State-registered firms follow their state’s equivalents.
The yearly rhythm is the same everywhere: an annual updating amendment to Form ADV within 90 days of your fiscal year-end, your brochure delivered before or when a client signs, and a summary of material changes each year when there are any.
Most new firms buy help. XYPN prices its RIA Registration package at $3,500, its Standard First-Year Foundations at $6,150 and its Enhanced package at $10,250, with ongoing compliance consulting at $575 to $2,000 a month. See is XYPN worth it? for what’s included.
Choosing a custodian
If you’ll manage client assets, you need a custodian to hold them. A planning-only or advice-only firm that never touches accounts may not need one at all. The market changed in October 2026.
| Custodian | Minimum for a new RIA | Published costs |
|---|---|---|
| Schwab | No asset minimum, as reported (not published on its site) | $50 full transfer out; $250 per non-traded position |
| Fidelity | $100 million, reported to apply to all RIAs by June 30, 2027 | Not published |
| Altruist | ”No minimums” | $0 account maintenance; $50 full transfer out |
| Betterment Advisor Solutions | No account minimum, as reported | Platform fee of 0.12% to 0.20% a year by balance |
| Interactive Brokers | $0 account minimum | ”No custody fees” |
| BNY Pershing | Not published | Not published |
Fidelity’s change was reported by WealthManagement.com from a letter to advisors, which the company confirmed. The same outlet reported that Altruist is in the final steps of a sale to Vanguard, and that Schwab’s Jon Beatty wrote that Schwab has no asset minimum and more than 11,000 RIAs under $100 million. Ask any custodian you’re considering what it will require of you in a year, not just today.
E&O insurance
There’s no federal requirement to carry errors and omissions insurance, but some states have one. Oregon requires state investment advisers based there to carry at least $1 million of coverage, and Oklahoma requires an attestation each year that its registered advisers carry a policy. Custodians may set their own requirements.
Published prices are scarce, and most come from brokers. One advisor’s 2013 launch, written up on Kitces, paid $1,250 plus taxes for $1 million of coverage with a $5,000 deductible. An insurance broker quoted by Financial Planning in 2025 estimated about $5,000 to $7,000 a year for a $1 million limit at a firm with about $250 million of assets. A new firm with no assets should expect the low end, but get quotes.
What the first year costs
Kitces’ 2016 breakdown was “no more than maybe $5,000 to $7,000 in true startup costs”, with a website at $1,000 or $2,000. The 2013 guest post on his site came to about $10,000 of total first-year expenses. Both are dated, and they leave out office space and any salary. Altruist, a custodian with an interest in the answer, estimates $52,000 for a first year that includes renting an office.
Once revenue arrives, overhead settles. Kitces’ 2026 benchmarking slides put a solo firm’s overhead at about 30% of revenue, leaving 70% as the owner’s earnings before pay.
The first year, in order
- Before you file: choose a niche and a fee model, form the entity, and decide state or SEC. See how to choose a niche and how to price financial planning.
- Registration: Form ADV Parts 1A, 2A and 2B, your representative registration, compliance manual and code of ethics. One advisor who left two broker-dealers said the whole process, from forming the LLC to launch, “took roughly 45 days” (thread). That’s one advisor’s experience.
- Operations: custodian, CRM, planning software, billing, E&O.
- Getting found: a website with your fees in plain text, listings in directories that verify fee-only status, and a few CPAs and attorneys who serve your niche.
- Runway: XYPN co-founder Alan Moore advises starting only “when you have the capacity for it to take three to five years.”
For where the first clients come from, see starting an RIA with no clients and how new fee-only advisors get their first 25 clients.
Where Wellspent fits
A new RIA needs to be found by people already choosing an advisor, without a per-lead bill or a share of fees it can’t afford. A Wellspent record in the public graph at find.wellspent.co shows your fees, specialties and SEC-checked fee-only status where search engines and AI assistants read, and prospects write to you directly, with no lead fees and no share of client fees. Membership also includes a monthly report on who AI assistants recommend and quarterly press placement with media partners, for $89 a month. See how it works.