How to Start an RIA Without Any Assets Under Management (AUM)

Becoming an independent registered investment advisor (RIA) is an opportunity to strike out on your own and take control of your career. Ideally, you would do so with an established client base, but if you’re unable to transfer your book of business from your previous firm, you might be starting from scratch. Starting an RIA with no AUM can add an extra layer of difficulty to the process, but it’s not an impossible obstacle to overcome.

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What Is the Minimum AUM to Start an RIA?

There is no minimum amount of assets under management (AUM) required to start an RIA firm. Among established RIAs, the typical advisor manages $427.1 million in assets, according to the Investment Adviser Association (IAA). ¹ But it’s perfectly possible to start with $0 in assets under management.

Assets under management determine whether you register as an RIA at the state level or with the Securities and Exchange Commission.

Are there advantages to starting an RIA with AUM? Certainly. It may be easier to find a custodian who’s willing to work with you when you already have assets under management. SEC rules require registered investment advisors to use a qualified custodian to hold client assets. While some RIA custodians have no minimum AUM threshold, others do.

Starting an RIA with a minimum AUM can offer an advantage for growth. Your existing client base could be a valuable source of referrals, helping you to reach more prospects as you ramp up other marketing efforts. Having some clients already also adds to your credibility, which can send positive signals to prospects who may be interested in your firm.

Again, however, AUM is not a requirement for going independent as an RIA.

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How to Start an RIA With No AUM

Starting an RIA with no AUM requires a certain measure of planning. Mapping out your strategy beforehand can increase your chances of success. Here’s a guide on how to start an RIA with zero assets under management, step by step.

Obtain a Securities License

A securities license is required to start a registered investment advisor firm and become an investment advisor representative (IAR). If you don’t have a securities license yet, you’ll need to obtain one.

The Series 65 exam is the standard license required for IARs. This exam tests your knowledge of ethics, laws and fiduciary responsibilities; passing it allows you to offer investment advice and manage client portfolios for a fee. You may claim an exemption from taking this exam if you hold any of these credentials:

• Certified Financial Planner™ (CFP®)
• Chartered Financial Analyst (CFA)
• Chartered Financial Consultant (ChFC)
• Chartered Investment Counselor (CIC)
• Personal Financial Specialist (PFS)
• Certified Investment Management Analyst (CIMA)

A Series 7 license enables you to trade securities on clients’ behalf. You can substitute a Series 7 and Series 66 license for a Series 65 if you plan to seek dual registration as a broker-dealer and IAR. The Series 7 requires the Securities Industry Essentials (SIE) exam as a prerequisite.

Estimate Startup Costs

Creating an RIA startup budget allows you to plan for initial as well as ongoing costs as you work on finding clients. It’s possible to start a small RIA firm with $10,000 or less if you keep the budget lean, though actual costs can vary. However, a more realistic estimate may be closer to $25,000, according to AdvisorLaw. ²

Some of the most common expenses you may need to budget for include:

• State registration filing fees
• Business formation fees
• Exam fees if you have not yet completed the Series 65 exam
• Minimum deposit requirements to open a business bank account
• CRM and accounting software
• Website domain and hosting
• Business cards
• Professional logo design or website design
• Custodian fees
• Errors and omissions insurance
• Email marketing services
• Lead generation services
• Portfolio analytics and financial planning software
• Compliance software
• Compliance consultant services
• Surety bond, if required
• Rent and utilities if you’re leasing office space
• Office furnishings and supplies

As your firm grows, you may need to expand your budget to include employee payroll and benefits.

If you have a limited budget or want to keep costs low until you begin working with clients, you may need to prioritize your startup expenses. For instance, having a professional website is important for gaining a foothold in local searches, but a basic design may serve your needs until you can afford to invest in professional web development services.

Determine Your Services and Fees

You’ll need to decide what services you plan to offer and what to charge your clients. Over 95% of advisors registered with the SEC base their fees on AUM, according to the IAA, but they may also charge fixed fees, hourly fees, performance fees and subscription fees. A typical fee is around 1%, though advisors may charge more or less, based on the level of assets managed per client. 

Understanding who your target clients are can help you decide which type of fee structure to use.

Specifically, consider your ideal client’s demographic background, how much in assets those clients are likely to bring to your firm and the challenges or pain points you’re equipped to help them solve.

The type of clients you’re hoping to work with can influence your fee structure. For example, say that you’re interested in working with HENRY individuals (“high earners, not rich yet”). These clients may have little in terms of investable assets to speak of, at least for the present.

You might consider forgoing the traditional fee structure that dictates charging a percentage of AUM and charging a flat fee or hourly fee instead. Or you might use a tiered fee structure to determine what to charge.

That kind of approach could make it easier to attract clients who need financial advice but don’t meet a traditional minimum AUM threshold. That’s one of the chief benefits of starting an RIA: even if you’re doing it from zero, you have flexibility in deciding how to best serve your clients.

Complete State Registration

Since you’re starting an RIA with no AUM, you’ll register with your state, not the SEC. You’ll need to file Form ADV Parts 1 and 2 through the Investment Adviser Registration Depository (IARD). Part 1 requires information about your business, including its ownership, clients, employees, business practices and affiliations, as well as disciplinary history.

Part 2, the brochure, is where you’ll explain your business practices, including the fees you charge and any potential conflicts of interest. If you have any prior disciplinary actions on your record, you will explain those here as well.

There’s also a Part 3 to Form ADV, which is the relationship summary. This summary should briefly explain the types of services you plan to offer, the fees and costs your clients will pay, the required standard of conduct you follow, potential conflicts of interest and prior disciplinary history, if any.

You may need to file Form U4 to show that you’ve completed the requirements for registration. Whether you need to file depends on where you register.

For example, if you’re planning to register in Texas, Form U4 is required. Additionally, you must be able to demonstrate solvency, though a surety bond is not required. Ohio doesn’t require sole proprietors to pay an IAR fee or file Form U4, but you must have passed the Series 65 exam or the Series 7 and Series 66 exams.

It’s wise to check with your state’s regulatory agency to find out what forms and fees are required when starting an RIA with no AUM or clients. You may also consider working with a registration consultant who can guide you through each step of the process. 

Research RIA Custodians

You’ll need to choose an RIA custodian to hold client assets once you have some to manage. While many custodians expect you to have $10 million, $50 million or $100 million in assets under management, it’s possible to find platforms that have no minimum AUM requirement.

As you compare them, consider the following:

• What range of services do they offer?
• How much will the custodian charge?
• How easily does the custodian’s software integrate with the rest of your RIA tech stack?
• Is there a user-friendly client portal or dashboard?
• Does the custodian provide you with helpful tools, such as visualization tools or model portfolio builders that you can use to serve your clients?
• What type of support does the platform offer?

Cost is likely to be a central concern if you’re starting an RIA with no AUM, but it’s important to consider what you’re getting in return. A custodian that’s willing to accept you with no assets under management and offers a comprehensive range of features and benefits may be worth paying a slightly higher fee for if you’re able to leverage those features to scale your business.

Additionally, it’s worth noting that some custodians charge no fees to advisors directly; instead, those costs are passed on to your clients. That may be attractive to you if you’re hoping to keep costs as low as possible, at least initially.

Develop Your Marketing Strategy

Marketing is one of the primary drivers of growth for advisors, but it can be particularly important if you’re going independent with no clients. The average advisor spends $15,908 per year on marketing, according to a 2024 Broadridge survey. ³ Whether you spend more or less to market your new RIA can depend on your budget, marketing channels and promotional strategies.

Your marketing plan might include social media promotion, digital ad campaigns, email and direct mail marketing, search engine optimization to drive traffic to your website, as well as local advertising, like newspaper ads or billboards.

If you’re interested in generating leads online but don’t have time to test different marketing strategies, you might consider a third-party solution. SmartAsset AMP is an end-to-end lead generation and marketing solution for fiduciary advisors. This subscription-based service, which matches you with validated investors, comes with a variety of features designed to help financial advisors create efficiencies by automating their marketing and lead generation efforts.

Advisors using the platform can create personalized text messaging and email nurture campaigns that automatically go out to leads. Additionally, AMP’s Live Connections feature enables advisors to immediately connect with leads over the phone with the help of a SmartAsset representative.

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Frequently Asked Questions

Bottom Line

Starting an RIA with no AUM is possible, but it requires a clear plan for registration, compliance, custody, pricing and client acquisition. Without an existing book of business, your early success may depend on how well you define your target clients, control startup costs and build a repeatable marketing process. The path may be more challenging than launching with assets already in place, but going independent can give you more control over your services, fee structure and long-term growth strategy.

Tips for Growing Your Advisory Business

• Financial advisor marketing often requires some experimentation to figure out what works for your firm and what doesn’t. Partnering with an established marketing service can save you time, money and frustration if you’re not yet getting the results you desire. SmartAsset AMP (Advisor Marketing Platform) is a holistic marketing service financial advisors can use for client lead generation and automated marketing. Sign up for a free demo to explore how SmartAsset AMP can help you expand your practice’s marketing operation. Get started today.
• If your efforts to grow your firm pay off and your AUM grows to $110 million or more, you’ll need to register with the SEC. Switching from state to SEC registration involves additional paperwork and fees. You may want to consult an attorney or RIA compliance specialists to ensure that you’re completing the required steps.

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