If your advisory firm manages more than $100 million in client assets, you must register with the SEC; below that, state rules apply unless you don’t want to trigger the filing at $90 million. Many states—California, Illinois, Ohio—require registration for 25–100 million when you have a local presence or clients. Calculate AUM under Rule 203A‑1, exclude proprietary holdings, and keep quarterly snapshots to watch thresholds. Update filings promptly when AUM shifts, and further details follow. Keep strategy current steadily.

Key Takeaways

• Federal registration required when AUM reaches $100 million; below that, state registration suffices.
• A soft‑dollar trigger at $90 million allows pre‑registration with the SEC before hitting $100 M.
• If AUM dips below $90 M after registering federally, the adviser must revert to state registration to avoid dual registration.
• State rules vary: e.g., California, Illinois, Ohio require registration for 25‑100 M AUM if there’s a physical presence or local clients.
• Maintain accurate risk registers and reconcile client data quarterly to detect threshold crossings and trigger timely filings.

Is Your RIA Above or Below the $100 M Registration Threshold?

If your assets under management fall below $100 million, your RIA stays under state securities regulation; once you cross that mark, the SEC takes over and you must register under its rules. You must conduct a precise Status Assessment to determine your current AUM. Use SEC Rule 203A‑1 to calculate all managed accounts, proprietary assets, and related‑person holdings, valuing each at market value as of the fiscal year end. Slight shifts can trigger a Compliance change, so maintain an up‑to‑date risk register. A RIA hovering near the threshold should consider the soft‑Dollar trigger at $90 million, which allows voluntary SEC registration prior to crossing $100 million. If AUM dips below $90 million, you’ll need to withdraw from SEC registration and file with the appropriate state regulator. Accurate Risk Evaluation prevents costly sanctions, state fines, or involuntary registration shifts. Additionally, monitoring AUM updates keeps you compliant and reduces audit exposure.

How Does the SEC Determine the $100 M RIA Threshold?

How does the SEC determine the $100 M threshold for RIAs? The threshold stems from Section 203A of the Investment Advisers Act, amended by NSMIA, which laid out a bright‑line rule: advisers managing $100 million or more in regulatory AUM must register with the SEC, while smaller advisers typically register at the state level. When computing regulatory AUM, you sum the market value of all accounts for which you provide continuous, regular supervisory or management services, as required on Form ADV, Part 1A, Item 5. The calculation uses the most recent 12‑month period, with a quarterly snapshot, and excludes proprietary or personal assets. The SEC’s look‑through rule requires you to include assets of private funds—such as hedge or private‑equity funds—when you exercise discretionary authority or provide ongoing supervisory services, preventing a false low threshold. Stay compliant, audit your counts quarterly. This approach guarantees you meet federal obligations without unnecessary state duplication in advance.

Which States Require RIA Registration Under $100 M?

Wondering which states require RIA registration for firms managing under $100 million? You’ll need to watch for states that apply the 25‑to‑100 million AUM rule. Major players—California, Illinois, and Ohio—mandate registration when a firm’s AUM falls in that range and has a physical presence or serves local clients. States like Oregon, Pennsylvania, and Washington also apply the rule but add client or solicitation thresholds.

Key states and conditions:

• California specifics: registration applies to firms with 25–100 million AUM that are headquartered or serve California clients.
• Illinois nuances: from 2024, firms with 30–100 million AUM must register if they have Illinois business activities.
• Texas: requires registration only if the firm’s principal office is in Texas and it manages less than 100 million AUM across all accounts.

Ohio, Oregon, Pennsylvania, and Washington expand registration obligations, while California and Illinois add client or presence thresholds. Stay compliant by reviewing criteria before clients.

What Are the Steps for SEC RIA Filing?

The first step to SEC registration is now to confirm eligibility and assemble required Form ADV documents. Verify AUM exceeds $110 million. Gather Part 1 info then draft Part 2A, Part 2B brochures and a Regulation S‑P privacy notice. Create an IARD account, pay the $225 SEC fee, and any state fees. Submit Part 1 through IARD within 30 days of hitting the threshold—this is the initial Submission Timeline. File Form U4s for supervised persons. After filing, upload Part 2A/B PDFs within 120 days of fiscal year‑end. File an annual updating amendment within 90 days of year‑end. Provide a code‑of‑ethics summary; if you hold client funds, file Form ADV‑E. Ongoing Document Review keeps amendments current. Be sure to check field for accuracy to comply with disclosure regulations and stay compliant.

Mid‑Size Adviser Registration Choices (AUM $100–$110 M)

Once you confirm that your AUM sits between $100 million and $110 million, you enter the mid‑size adviser category. You can voluntarily register with the SEC or opt for state registration. Choose SEC registration if you have clients in 15+ states or manage private funds; it offers single‑firm oversight and a uniform framework. State registration may be preferable when you qualify for de‑minimis exemptions—fewer than five clients per state—or when your firm has a concentrated client base in one jurisdiction. Consider the following factors:

Confirm your AUM of $100–$110M: secure SEC registration if you span 15+ states or manage private funds; otherwise, state.

• Compliance Costs: SEC fees hit $150,000–$200,000 annually, while state fees multiply per state but are individually lower.
• Client Impact: Federal oversight can reassure high‑net‑worth clients; state rules may allow faster, less burdensome compliance.
• Examination Risk: SEC inspections occur 10% annually versus 15% for state firms.

You should evaluate the timeline—45–60 days for SEC, 30–90 days for state filings—before deciding. Your choice should align with strategic goals.

Exemptions and RIA Registration

Because your firm’s AUM falls below the $100 million threshold, you can stay state‑registered or claim a statutory exemption. • Foreign Client exemption: If you have fewer than 15 U.S. clients and under $25 million in U.S. client AUM, you may avoid SEC registration while still filing Form ADV Part 1A and paying fees. • Private‑fund and venture‑capital exemptions: Managing private funds below $150 million or only venture‑capital funds triggers an exempt reporting adviser status; you cannot solicit publicly but you still file Form ADV Part 1A. • Intrastate exemption: Serving only in‑state clients lets you rely on state regulation; but you must file a notice and keep operations wholly in‑state. • Hybrid Advisor: If you mix client types, assess each class; a hybrid model may fall under one exemption for part of your practice while remaining state‑registered for the rest. • State notice filing: When you cross the $100 million line but stay under $110 million, file a notice but remain subject to state rules.

What Happens When Your AUM Fluctuates Around $100 M?

Do you know how a single monthly dip below $100 million can trigger a slide into SEC registration? That one‑month check forces you into the 90‑day filing window, even if your 12‑month average stays constant. AUM volatility creates a yo‑yo effect, and every crossing risks compliance gaps that cost time and money.

• Monthly AUM checks set the trigger, not the rolling average.
• 90‑day filing deadline is strict; missing it invites penalties.
• Dropping below 100 M after registration gives a 90‑day grace before de‑registration.

Because the SEC measures only the month‑end figure, your advisor team must monitor accounts daily. If a dip persists beyond 90 days, you must re‑fil Form ADV and register in each state where you operate. Unplanned volatility can force dual registration or state approvals, deepening compliance costs.

Plan quarterly reviews, automate threshold alerts, and maintain a compliance playbook to avoid regressive surprises. And stay ahead of regulatory changes.

How to Verify Your RIA Exemption Eligibility

If you want to verify your RIA exemption, start by calculating your AUM using the market value of all securities portfolios, pooled vehicles, and uncalled commitments, as required by Form ADV Rule 203A‑1(c). Review your client roster and confirm you meet the intrastate, foreign private, venture capital, private fund, or family‑office criteria. Verify that your assets stay below the relevant thresholds, and that you file the correct checkboxes on Schedule D of Form ADV. Conduct a thorough Documentation Review to confirm that all calculations, client counts, and banking records align with the SEC’s gross‑AUM definition. Maintain an Audit Trail that documents each recalculation and any adjustments. File the Part 1A update within 90 days after your fiscal year’s close to reassert exemption status, and file an interim amendment if you cross $100 million. Update your state registration filings as needed to obey state law. Maintain these practices meticulously today.

How Dual Registration Rules Impact Your Compliance

When you register with both the SEC and state regulators, you’re subject to a dual compliance regime that amplifies administrative costs and oversight. Dual registration forces you to meet two sets of rules, which increases audit overlap, elevates compliance cost, and multiplies employee licensing obligations. Consider the key impacts:

Registering with both the SEC and state regulators multiplies costs, audit overlap, and licensing burdens, demanding a unified compliance strategy.

• Two Form ADV filings: one federal, one state—each with distinct disclosure and fee schedules.
• Separate exam cycles for IARs: Series 65 for the SEC and state‑specific exams, plus differing continuing‑education timelines.
• Competing custody and record‑keeping demands: quarterly state statements versus SEC’s annual surprise exams, with five‑year record retention under Rule 204‑2.

You’ll also face intensified regulatory scrutiny, as SEC and state examiners rarely coordinate. Preparing dual documentation and reconciling disparate reporting formats will be your operational challenge. Implementing a unified compliance program that maps SEC and state checkpoints will streamline submissions, reduce audit overlap considerably, and keep compliance cost predictable.

Frequently Asked Questions

What Annual Fee Do Sec‑Registered Advisers Pay With $100m–$110m AUM?

You’ll pay an annual SEC fee ranging from about $4,000 to $5,000 when your AUM sits between $100 million and $110 million. The fee is calculated on a sliding scale, roughly 0.00008% of regulatory assets. This structure guarantees a proportional cost. The total fee you remit appears in the Cost Breakdown as a separate line item, included with initial filing and state registration adjustments. You’ll file by year‑end promptly today.

Do Registration Thresholds Affect Custody or Recordkeeping Requirements?

Think thresholds are irrelevant? They’re actually changing your compliance load. When you’re at $110 million, SEC custody rules kick in—mandatory quarterly statements, surprise CPA exams, and qualified‑custodian access. Below that, state thresholds can waive surprise audits and simplify recordkeeping, but you still must maintain five‑year logs under Rule 204‑2. So thresholds directly shift custody requirements and recordkeeping duties, tightening obligations as you grow to maintain compliance with federal standards and avoid enforcement.

How Is AUM Calculated for Registration Eligibility?

To determine your AUM for registration, you calculate the net asset value (NAV) of all client accounts, using a consistent valuation approach. Include market‑valued securities, cash, and other assets, regardless of discretionary status. Exclude proprietary or impersonal‑advice accounts. Add any sub‑adviser assets you control, subtract cash balances. Compute the NAV measurement at most recent fiscal day, then reference the SEC’s $100 million threshold for federal registration. This NAV measurement drives eligibility.

Can a Firm Avoid Dual Registration by Spinning off a State Entity?

First, let’s remember: a sharp knife cuts through messy kale. No, you can’t sidestep dual registration by spinning off a state entity. A spin approach that merely rebrands your assets still faces SEC and state scrutiny if the separate entity lacks true operational independence. A separate entity must run its own board, client contracts, and compliance, or regulators will reclassify it, forcing you to register at both levels, within time.

What Is the Typical Approval Timeline After Submitting Form Adv to the SEC?

In the Review Process, you’ll receive acknowledgment within 3–5 business days. Typically, SEC completes its review in 30–45 calendar days for a clean filing. If you hit a Feedback Cycle, each correction adds 10–14 business days. Incomplete submissions can extend to 60–90 days. Once approved, you’ll get an effective date notice within 1–2 business days. You must make sure all disclosures match Part 1 and Part 2A to avoid delays and complete corrections.

Conclusion

Remember, actions speak louder than words when steering RIA thresholds. If your assets hover near the $100 million mark, you must monitor both SEC and potential state filings. Double-check exemption tests, document AUM swings, and keep updated records. When dual registration applies, align your governance to satisfy all jurisdictions. Staying compliant today guarantees smooth operations tomorrow—stay vigilant, stay compliant. Consult counsel promptly; federal preemption often overrides state rules unless your advisory activities trigger state concerns today.

James Bateson

Lawyer