In general, besides a few notable exceptions, registered investment adviser (RIA) firms with $100 million on greater in assets under management (AUM) are required to register with the SEC. However, there are four types of annual filing fees that an RIA firm registered with the SEC may be required to pay during the initial registration process and when renewing the firm’s registration in subsequent years.
The four types of annual filing fees that an SEC-registered RIA firm may be responsible for are:
- SEC initial registration and annual update amendment fees
- State notice filing fees
- Individual investment adviser rep (IAR) filing fees
- State branch office fees
SEC Initial Registration and Annual Update Amendment Fees
The SEC initial registration and annual update amendment fees are based on the advisory firm’s total regulatory assets under management at the time of the Form ADV filing. The initial and annual update amendment fees are presently as follows:
- Less than $25 million AUM: $40
- $25-$100 million AUM: $150
- $100 million or more AUM: $225
The SEC will not review an advisory firm’s initial application until the initial filing fee has been paid. Similarly, an RIA firm is not able to file it’s annual updating amendment until it has paid the annual update amendment fee.
State Notice Filing Fees
Even though an RIA firm may be registered at the federal level with the SEC, the firm is still required to make the proper state notice filings. These notice filing fees are paid directly to the relevant states and range from $30 (state of Idaho) to $400 (state of Illinois). Some states do offer a discount in future years after the initial notice filing fee is paid.
State Investment Adviser Representative Registration Fees
It’s also important to note that all individual IAR registrations are handled at the state level regardless of whether firm is registered at the state or SEC level. In general, SEC-registered RIA firms are required to register an individual IAR in the state in which the IAR is physically located. These fees range from $0 (states of Louisiana and Minnesota) to $285 (state of Texas) per year.
State Branch Office Fees
A small handful of states require SEC-registered RIA firms with a branch office in their state to pay an annual branch office filing fee. Often these fees paid are paid separately via check and are generally less than $100.
When Annual Filing Fees Are Paid
After the initial registration, all fees paid to the state(s) (these would be notice filing, IAR, and branch office fees) are generally due a few weeks before the end of each calendar year. For this year’s renewal season, fees were due on December 12, 2014. On the other hand, the SEC annual amendment filing fee is not due until the firm attempts to file its annual Form ADV amendment filing. The filing will not be accepted until the SEC fee is paid. Firms are generally required to file the amendment within 90 days of the firm’s fiscal year end (e.g. March 31 for firms with a December 31 fiscal year end).
As RIA compliance consultants, we strongly encourage the Chief Compliance Officer (CCO) of each investment advisory firm registered with the SEC to review its firm operations to ensure that the firm has made all of the necessary filings and submitted the proper payments.