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Launching a Registered Investment Advisor firm in New Mexico can be a rewarding venture, but you need to get through the state's compliance requirements first. And, well, they're not exactly simple.
This guide is for financial advisors who want to go independent, existing RIA firms looking to expand into New Mexico, and any financial professional who needs to understand how the state's regulatory system actually works. You'll learn about the registration process, fees, ongoing requirements, and some state-specific rules that could trip you up if you're not careful.
In New Mexico, investment advisers and their representatives are licensed and regulated by the New Mexico Regulation and Licensing Department (RLD), Securities Division. This is the agency that handles all licensing, examinations, and enforcement actions in the state.
But here's something worth noting. The investment adviser industry is growing quite a bit right now. Federally registered firms alone now manage a record $144.6 trillion in assets, which is a 12.6% increase from last year. State-registered RIAs are growing too. Nationally, these firms saw their collective assets under management grow by over $18.5 billion in 2024.
So there's opportunity here. But you need to do this right.
Your registration requirements depend on how much money you manage and where your office is located. Federal law determines which regulatory body has jurisdiction over you (either the state or the SEC).
The main factor is your AUM. If you have less than $100 million in assets under management, you'll generally need to register with the New Mexico Securities Division. Advisors with over $100 million in AUM must register with the federal SEC instead (and may want to consider SEC compliance software to manage those requirements).
This $100 million threshold has been in place since 2012, but it might not stay that way. In an April 2025 speech, the Acting SEC Chairman mentioned that SEC staff had been told to evaluate whether this threshold still makes sense given current market conditions. There's talk of maybe increasing it to $150 million.
If that happens, thousands of currently SEC-registered advisors would shift back to state-level registration. Which means more firms could end up dealing with New Mexico's specific requirements.
New Mexico gives out-of-state advisors a bit of breathing room with a de minimis exemption. You're exempt from New Mexico registration if you have no physical office in the state and you have five or fewer clients who are New Mexico residents during any 12-month period.
Get a sixth client? The exemption disappears and you need to register immediately.
This rule causes confusion sometimes. A New Mexico enforcement action against an advisor named Douglas H. Lien specifically cited this issue. The advisor thought the limit was 15 clients when it was actually five. That's a pretty costly mistake.
Also, don't assume every state has the same rule. Some states, like Texas and Louisiana, require registration before you accept a single client.
If you maintain a physical office in New Mexico, the de minimis exemption doesn't apply to you. Any advisor with a place of business in the state must register with the Securities Division (assuming you're under the $100 million SEC threshold), no matter how many clients you have.
Getting registered isn't a single form you fill out and forget about. It's a process with multiple steps, and you need to complete all of them.
Before you file anything with regulators, you need to set up your business as a formal legal entity. This means registering your business (as an LLC, S-Corp, or C-Corp) with the New Mexico Secretary of State and getting all your formation documents in order.
The entire registration process is handled electronically through the Investment Adviser Registration Depository (IARD), which is a system run by FINRA on behalf of state and federal regulators.
Form ADV Part 1 is your core application. It's filed electronically via IARD and it's basically a check-the-box form that asks about your firm's business structure, ownership, clients, employees, and any disciplinary history.
Form ADV Part 2 (Parts 2A and 2B) is your client-facing disclosure document, sometimes called the "brochure." Part 2A describes your firm's services, how you charge fees, and any conflicts of interest. Part 2B, the "brochure supplement," gives background information about the individual representatives who will be working with clients (their education, experience, and disciplinary history).
Every person who provides investment advice on behalf of your RIA firm needs to be registered as an Investment Adviser Representative. You do this by filing Form U4 electronically through the Central Registration Depository (CRD) system, which connects to IARD.
To register as an IAR in New Mexico, you need to pass one of the following exam requirements:
But there's good news for experienced professionals. New Mexico will waive the exam requirement if you hold one of these professional designations in good standing: CFP, CFA, ChFC, CIC, or PFS.
All state filing fees are paid through the IARD system. The specific amounts are covered in the next section.
Here's where things get a bit more involved. Filing Form ADV and paying fees through IARD is necessary, but it's not enough. New Mexico has what's called an "IARD-Plus" requirement, which means you also need to send a supplemental package of documents directly to the New Mexico Securities Division.
The New Mexico Investment Adviser Registration Packet says you must file these items directly with the state:
If you skip this "IARD-Plus" step, your application will be incomplete and your registration will be delayed.
Here's what you'll pay for registration and renewal in New Mexico. These fees go to the state via the IARD system:
Initial Firm Registration: $400
Initial IAR Registration: $75
Annual Firm Renewal: $200
Annual IAR Renewal: $75
These are New Mexico's fees only. They don't include the separate system processing fees that FINRA charges for using and maintaining the IARD platform.
Getting registered is just the start. Staying compliant means following a strict set of ongoing requirements. And this is where a lot of firms get into trouble.
You're required to update your Form ADV at least once a year, within 90 days of your fiscal year-end. This keeps all your disclosures current.
Separately, all firms and IARs must renew their registrations at the end of every calendar year to stay licensed for the following year. This process runs through the IARD Renewal Program, and the timeline is strict. If you miss it, there are serious consequences.
For the 2025-2026 renewal cycle (renewing for 2026), the deadlines are:
Firms that miss the payment deadline "will not have their state notice filings renewed and therefore will not be eligible to conduct business as an investment adviser in those states as of January 1." So if you miss this deadline, you're basically out of business on New Year's Day.
New Mexico requires firms to create and maintain a comprehensive compliance manual (also called Written Supervisory Procedures). A copy of your firm's privacy policy, which is a key part of this manual, is required during initial registration.
The challenge for many firms is figuring out what to include. The North American Securities Administrators Association (NASAA), which the NM Securities Division is a member of, provides some guidance. The NASAA 2025 Annual Report lists the most common compliance deficiencies found during state-level examinations:
This list is pretty much a roadmap from regulators. Your New Mexico compliance manual needs to have detailed procedures for these seven areas at a minimum. The fact that New Mexico specifically asks for client contracts and privacy policies during registration shows they're paying attention to these same issues.
When you're putting together marketing materials for your RIA, compliance review can eat up a lot of time. Some firms are using RIA compliance software to automatically review their marketing assets for compliance issues, which can help reduce risk and handle marketing compliance at scale. But that manual still needs to be thorough and tailored to your specific business.
Books and records deficiencies are the most common compliance failure found by state regulators. So this is something to take seriously.
New Mexico's specific rules are in the New Mexico Administrative Code (NMAC), Title 12, Chapter 11, Part 6. NMAC 12.11.6.8 lists the specific books, ledgers, and records that all RIAs must create and maintain, including journals, ledgers, client communications, and trade records.
A critical detail is the retention period. These records must be kept in an easily accessible place for not less than six years from the end of the fiscal year when the last entry was made.
This is a common trap. Many advisors who are familiar with the SEC's "five-year" rule (Rule 204-2) might not realize that New Mexico requires six years. If you're following the SEC's 5-year standard, you're out of compliance with New Mexico's 6-year rule.
New Mexico requires all registered RIAs to maintain a minimum net worth at all times. The amount depends on what activities your firm is involved in:
Discretionary Authority: $10,000 minimum net worth
Custody of Client Assets: $2,000,000 minimum net worth OR a $2,000,000 surety bond
Prepaid Fees (more than $500, six months in advance): $10,000 minimum net worth
The jump from $10,000 for discretion to $2,000,000 for custody is massive. This isn't an accident. New Mexico designed this rule to strongly discourage state-registered RIAs from taking custody of client assets. They want you to use a qualified, independent custodian instead. For more information on selecting the right partner, check out our guide to RIA custodians.
Processing times can vary depending on how complex your application is, but the New Mexico Securities Division has a pretty good track record. According to state legislative budget reports, the Division's performance target is to process 99% of investment adviser registrations within 30 days of receiving a completed application.
Yes. New Mexico allows an out-of-state advisor without a place of business in the state to have up to five clients in a 12-month period without registering. If you get a sixth client, you need to register.
An IAR must pass either the Series 65 exam OR the Series 7 and Series 66 exams. New Mexico will waive this examination requirement if you hold a current CFA, CFP, ChFC, CIC, or PFS professional designation in good standing.
No. An out-of-state advisor can register in New Mexico without a physical office (for example, once you exceed the five-client de minimis threshold). But if you do maintain a physical office in the state, registration becomes mandatory (assuming your AUM is below the $100M SEC-registration threshold).
The investment advisory industry is growing right now, with record assets under management and client counts across the country. New Mexico offers a clear path for new advisors to register, with a defined regulatory body, transparent fees, and reliable processing times.
But the state's specific rules require attention. You've got the "IARD-Plus" supplemental state filings, the 6-year books and records rule, the stringent net worth requirements, and those high-stakes annual renewal deadlines.
And the data from state regulators shows that compliance isn't easy. Books and records is the number one deficiency found by examiners, which means even established firms make critical mistakes.
If you're spending hours manually reviewing every piece of marketing content to make sure it's compliant, you're probably wasting time that could be spent growing your business. Compliance review doesn't have to be a bottleneck. Tools exist now that can automatically review your marketing assets for compliance issues, reducing risk and helping you handle compliance at scale. If that sounds useful, you can request demo access to see how AI-based compliance tools like Luthor work in practice.
Managing compliance isn't separate from your business. It's a core part of running an RIA in New Mexico.