How To Start An RIA

As the lion’s share of established advisors who have registered investment advisers, or RIA, firms are nearing retirement, at the same time, there is a growing base of younger clients seeking specialized services from financial advisors. Meanwhile, newer industry business models now offer more diverse options that can allow advisors to customize an RIA business more than ever before.

In short — it’s a great time to consider starting an RIA. 

While for many, establishing one’s own RIA seems like an insurmountable task, it is not necessary to flesh out the entire plan immediately. Securing the basic aspects of a business plan can build the framework for the business, provide a solid foundation, and supply some integral clarification that will help to determine the direction that the business will take, as well as its next steps. 

Identify your RIA’s strengths and weaknesses

First, advisors should identify which existing issues investors are facing that their RIA business will aim to address. The advisor considering launching an RIA should determine how the firm will go about solving those issues and to whom those solutions will be available. Clarify what will make the firm stand out from the others. Determine expected costs of operation, potential revenue, and the amount necessary to make the business a viable operation. 

Finally, consider what obstacles the business could potentially face in the future, from development onward. It’s not necessary to predict the future or anticipate every challenge, but having a loose plan in place for addressing anticipated obstacles could prove helpful and save time and money in execution. 

Who are your clients?

In order to shape a business, it’s important to know not just what its financial goals are, but to whom it will provide services. Identify the firm’s target client demographic to get a stronger sense of the direction an RIA firm will take. Perhaps you want to provide advice regarding more complex investments or investment strategies for those seeking such services. 


Ready to start your own RIA firm? Give us a call at (303) 952-4025 today, or contact us for a complimentary consultation!


Think about the clients, what they need, what you can do for them, and what they can afford, and what they are willing to pay. This will help to shape the business model and identify the tools that providing that kind of service to that specific clientele will require.

RIA fee strutures

Next, create a model of the business and its revenue. RIAs typically have three primary fee structures. 

  1. The first is an assets-under-management, or “AUM,” structure. In an AUM structure, the RIA charges a percentage that is based on the amount of assets managed per client. The AUM structure focuses on investment management, and financial planning services are included in the percentage of AUM fee that is charged to the client. 
  2. Another option is an hourly or project-based fee structure. In that type of fee structure, the RIA charges the client for the amount of time spent with them or on their account, and the client is billed for the time spent by the RIA. 
  3. A subscription fee structure is another form, where the RIA offers a defined, specific scope of work, for which it charges a flat fee on a monthly basis. Typically, subscription structures focus on financial planning, as well as any primary service for which the client is paying. A subscription structure may also be combined with separate services charged on an AUM structure. 

As each structure has its positive and negative aspects, identifying the business’s client demographic will be one of the best tools for determining which type or types of fee structures to employ.

RIA compliance

Arguably the most complex aspect of setting up an RIA is compliance. In order to establish an RIA, an individual must correctly complete all paperwork and ensure that it is properly filed. An advisor will likely be able to handle the first steps of choosing a company name, deciding the entity type (e.g., sole proprietor, LLC, or corporation), opening a checking account, and securing insurance. However, compliance requirements beyond those initial tasks can become complex and even tricky. 


Ready to start your own RIA firm? Give us a call at (303) 952-4025 today, or contact us for a complimentary consultation!


The advisor can ensure safe and sound compliance by hiring an experienced RIA compliance professional or team with expertise in navigating the RIA establishment process. Such experts will guide and advise the advisor about creating and filing all compliance documents. Some teams, such as AdvisorLaw’s RIA Compliance team, also offer ongoing compliance services, as well. 

Working remote

Given the upheaval over the past couple of years, those seeking to establish RIAs today have the option of waiting to secure office space or even foregoing it altogether. Without the need to secure and outfit offices before launching an RIA, today’s advisors benefit from reduced costs and effort prior to launch. Instead, client meetings can take place virtually, at an advisor’s home office, at client homes, or elsewhere. Additionally, there are more and more spaces available to rent by the hour or day, in the case that a meeting must be held in a conference room or similar space. 

Technology and software needs

Another necessary step is to identify which software and tool options will be used in a firm’s back office. An RIA business will naturally require basic hardware for operation, including computers, scanners, mobile phones, and a place to receive mail. Additional software to consider includes financial planning and bookkeeping software, an online scheduling system and client relationship management system, and software for electronic signatures on documents. Video meeting tools and a cloud-based document storage provider will likely be necessary, as well. Software for maintaining compliance on the firm’s website, social media, and emails can also be valuable.

An RIA firm’s online presence is more important than ever, which means that the firm will need to establish a URL through a web host and build a website, the content will require management, and an email server must be secured. Finally, the firm will want to devise a social media strategy. 

AdvisorLaw offers RIA registration, setup, and ongoing compliance

The aforementioned elements can help to frame an RIA business. Once the frame is built, you are already on your way to RIA formation. From that point, you can begin to incorporate more specifics of your business and tailor it for its specific goals and clients.

AdvisorLaw offers custom RIA setup and registration, as well as ongoing compliance services for registered investment advisor (RIA) firms. Our compliance team includes both attorneys and Certified Securities Compliance Professionals (CSCPs).

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