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This guide is for financial advisors thinking about going independent, existing firms that want to expand into South Carolina, or anyone who needs to figure out what the state actually requires from RIAs. You'll learn about the registration process, the fees you'll be paying, and what ongoing compliance looks like once you're up and running.
So here's what you need to know right away. In South Carolina, RIAs are regulated by the Securities Division of the South Carolina Attorney General's Office. This isn't just some separate commission. The Securities Division sits right inside the Attorney General's Office, which means the people reviewing your registration are backed by the full prosecutorial power of the state. That setup makes the stakes quite different from states where the regulator is a standalone body.
The compliance environment for 2024-2025 is being shaped by a few major forces. First, digital assets are now a primary enforcement target. The North American Securities Administrators Association identified digital assets and tech-based schemes as the top investor threat for 2025, and South Carolina is implementing this priority locally. You can see this in the state's 2024 enforcement actions against cryptocurrency firms.
Second, the RIA market is splitting in two. New data from NASAA shows that state-registered (smaller) RIA firms are shrinking in number. There was a net decrease of 322 firms nationwide in 2024. But at the same time, the assets managed by these firms grew by over $18 billion. On the flip side, SEC-registered (larger) firms hit record highs in 2024 for firm count, assets, and client numbers. So you're entering a market that's consolidating fast, with M&A pressure and competition from both shrinking state-level peers and growing national giants.
Third, South Carolina gives you an open-book exam. The regulator publishes the exact rules for examinations, capital requirements, recordkeeping, and conduct. This guide will walk through these specific regulations so you can build a compliance program designed to pass a state examination without drama. While state requirements differ from federal ones, familiarity with SEC compliance software can help you understand the broader regulatory framework.
The state's definition of an investment advisor is broad. It explicitly includes financial planners and anyone who advertises or holds themselves out as an investment advisor. Whether you register with the state or the SEC depends mostly on how much money you manage.
If you manage less than $100 million in assets, you register with the South Carolina Securities Division. Once you hit $100 million or more, you generally register with the SEC instead.
The federal "buffer rule" adds some flexibility here. You can choose to register with the SEC once you reach $100 million, but you must register with the SEC if your AUM hits $110 million. Once you're SEC-registered, you can stay that way as long as your AUM is at least $90 million.
If your RIA is based outside South Carolina, you need to understand the de minimis exemption. You're not required to register with the state if both of these conditions apply:
You have no physical office in South Carolina, and you've had five or fewer clients who are South Carolina residents during the past 12 months.
This five-client exemption is codified in state law. The moment you get that sixth client, registration becomes mandatory.
Having a physical office in the state changes things. If you maintain a place of business in South Carolina, you need to register regardless of how many clients you have here.
For SEC-registered advisors (called "federal covered advisers"), the rules are a bit different. You don't have to register with South Carolina, but you do need to "notice file" and pay fees if you either have a physical presence in the state or serve more than five South Carolina residents.
The registration process uses a federal system but includes state-specific requirements on top of that.
Before you can register, you need a formal business structure. That means setting up an LLC, S-Corp, or another recognized entity type.
South Carolina uses the Investment Adviser Registration Depository (IARD) system, which is run by FINRA. You'll need to apply for a FINRA Entitlement account first to access the WebCRD/IARD online platform.
Once you have access, you file Form ADV electronically. This has two main parts:
Form ADV Part 1 contains information about your firm's ownership, clients, business practices, and any disciplinary history.
Form ADV Part 2A (the "Brochure") details your services, fees, and conflicts of interest. You'll provide this to clients.
Form ADV Part 2B (the "Brochure Supplement") covers the professional background of your Investment Adviser Representatives.
While you're filing Form ADV through IARD, you also need to send a package of documents directly to the Securities Division by mail or email. The official checklist from the state specifies what you need:
Copies of all advisory contract forms you'll use with South Carolina clients. An unaudited balance sheet and income statement for your firm, dated within 45 days of submission. A surety bond in the required amount (more on that below). A list of all Investment Adviser Representatives doing business in South Carolina, along with their CRD numbers.
Each IAR needs to be registered by filing a Form U-4 through the CRD system. If your IAR isn't currently registered as a broker-dealer agent, there's an extra step. They have to get a criminal records history from the South Carolina Law Enforcement Division (SLED) and submit it with their application.
South Carolina's exam requirements are spelled out in the state regulations. An IAR must pass either the Series 65 exam or the combination of Series 7 and Series 66.
The state will waive the exam requirement if you hold certain professional designations. These include the CFP (Certified Financial Planner), CFA (Chartered Financial Analyst), ChFC (Chartered Financial Consultant), and several others. The full list is in the state regulations, and it represents the credentials South Carolina officially recognizes as meeting its standards.
All fees go through the IARD system. You'll pay them at initial registration and then annually when you renew.
The state doesn't publish an official timeline on its website, but industry analysis suggests the typical process takes 45 to 90 days. State regulators may take up to 45 days for the initial review. It's common to get a "deficiency letter" asking for clarifications or corrections, which extends the timeline.
All fees are paid annually at registration and upon renewal. These are the 2024 fees based on industry guides and the state's official checklist:
Initial Firm Registration Fee: $200
Annual Firm Renewal Fee: $150
Initial IAR Registration Fee: $50
Annual IAR Renewal Fee: $50
So if you're registering a new firm with three IARs, you're looking at $350 upfront ($200 for the firm plus $50 for each IAR). Your annual renewal will be $300 ($150 for the firm plus $50 per IAR).
Getting registered is just the start. Staying compliant is a continuous obligation, and the Securities Division conducts periodic examinations of registered firms. Understanding the full scope of RIA compliance requirements is essential for maintaining your registration.
You need to file an annual updating amendment to Form ADV within 90 days of your fiscal year-end. This keeps your information current.
All RIA and IAR registrations expire on December 31st. You renew annually through the IARD system by paying the required fees.
Your compliance manual needs to be tailored to South Carolina's specific requirements. The state provides direct links to its key regulations on its website, which means you're basically getting the auditor's checklist in advance. Many firms use RIA compliance software to help manage and maintain these policies.
Your manual should cover these core areas:
Code of Ethics: How your firm and its employees will conduct themselves.
Cybersecurity Policy: How you protect client data and systems.
Business Continuity Plan: What happens if there's a disruption to your business.
Privacy Policy: How you handle client information.
When South Carolina regulators come in for an examination, they're going to compare your actual practices against these written policies. So your manual can't just be a document you created once and forgot about. It needs to reflect what you actually do.
South Carolina has extensive requirements for what records you must keep. The state regulation lists all of them, but here are the major categories:
Accounting records: Journals, ledgers, bank statements, canceled checks, bills, and trial balances.
Client and transaction records: A memo of every buy or sell order, all powers of attorney, and all written client information used to form the basis of recommendations.
Communications: Originals of all written communications you receive and copies of all written communications you send. This includes advertising, circulars, and investment letters distributed to two or more people.
Employee conduct records: Records of every securities transaction where you or an IAR has beneficial ownership, plus copies of all Form U-4s and amendments.
South Carolina imposes minimum financial requirements based on whether you have custody of client assets or discretionary authority. These rules are in Regulation 13-406. If you're working with RIA custodians, understanding custody implications is critical for determining your bonding requirements.
The regulation defines "Net Worth" as assets minus liabilities, but it excludes intangible assets like goodwill. For individuals, it also excludes personal homes, home furnishings, and automobiles.
If you have custody of client funds or securities: You need a minimum net worth of $35,000 or a surety bond for that amount.
If you have discretionary authority but no custody: You need a minimum net worth of $10,000 or a surety bond for that amount.
If you have neither custody nor discretionary authority: No minimum net worth requirement.
If your firm's principal place of business is in another state and you're in compliance with that state's net worth rules, South Carolina exempts you from its requirements.
Regulation 13-502 lists practices that South Carolina considers dishonest or unethical. The most important one is at the top of the list.
You cannot recommend the purchase, sale, or exchange of any security without reasonable grounds to believe the recommendation is suitable for the client. This is fundamentally a documentation issue. The rule says you have to make "reasonable inquiry" into the client's investment objectives, financial situation, and needs.
A South Carolina examiner can cite you for this violation even if the investment was profitable. Your compliance file must contain documented proof of the suitability inquiry for every client, made before you gave a recommendation.
Other key prohibited practices include:
Entering into an advisory contract that isn't in writing or that fails to disclose your services, fees, the contract term, or whether you have discretionary power.
Failing to disclose all material conflicts of interest in writing. For example, if you receive commissions in addition to advisory fees, clients need to know that.
Failing to establish, maintain, and enforce written policies to prevent the misuse of material nonpublic information.
Placing an order without first obtaining written discretionary authority, or placing an order based on a third party's instruction without written client authorization.
Publishing any advertisement that doesn't comply with SEC Rule 206(4)-1 (the "Ad Rule").
At this point, it's probably worth mentioning that staying on top of all these requirements while also running your business and serving clients is a lot. Tools exist now that can help with the compliance burden, especially around reviewing marketing materials and communications. We'll come back to that at the end.
South Carolina adopted NASAA's IAR Continuing Education model rule, which became effective January 1, 2023.
Every IAR registered in South Carolina must complete 12 CE credits each year:
6 credits of IAR Ethics and Professional Responsibility (at least 3 of these must be on ethics topics).
6 credits of IAR Products and Practice Content.
If you're dually registered (both an IAR and a broker-dealer agent) and you're in compliance with FINRA's CE requirements, you're considered compliant with the 6-credit Products and Practices requirement. But you still have to complete the 6-credit Ethics requirement.
If you don't complete the 12 credits by the annual deadline, your status in the CRD system changes to "CE Inactive." Your registration status becomes "Approved Pending IAR CE," and this inactive status is publicly visible on the Investment Adviser Public Disclosure and BrokerCheck websites. You can still do business during the first year of inactive status, but if you don't complete the CE by the end of the second year, you can't renew your registration.
The typical timeline is 45 to 90 days. State regulators may take up to 45 days for the initial review, and it's common to receive a deficiency letter requesting additional information or corrections, which extends the process.
Yes. If you have no physical office in South Carolina and you've had five or fewer clients who are South Carolina residents during the past 12 months, you're exempt from registration. This exemption is codified in state law.
IARs must pass either the Series 65 exam or the combination of Series 7 and Series 66. The state will waive the exam requirement if you hold certain professional designations like CFP, CFA, or ChFC.
Not necessarily. You're required to register if you have a place of business in the state, but you may also be required to register based on the number of clients you serve here. If you have more than five South Carolina resident clients, you need to register even without a physical office.
If you don't meet the minimum net worth requirement, you must post a surety bond for the corresponding amount. The requirements are $35,000 for firms with custody and $10,000 for firms with discretionary authority but no custody.
Based on 2024 enforcement actions, digital assets are a primary focus. The state took action against cryptocurrency firms offering products that were allegedly unregistered securities. NASAA's 2025 report identifies digital assets and tech-based schemes as top investor threats, and South Carolina is implementing these national priorities locally.
The competitive environment you're entering is being shaped by some pretty significant trends.
The state-registered RIA market is consolidating. Nationwide, there was a net decrease of 322 firms in 2024, bringing the total to 16,575 state-registered RIAs. But even with fewer firms, total assets under management for state-registered RIAs grew by $18.5 billion to reach $361.8 billion. Over 98% of these firms have 10 employees or less.
What this tells you is that smaller solo-preneur RIAs are either being acquired, closing, or graduating to SEC registration, while established state-registered firms are capturing more assets from the market.
On the other side, SEC-registered advisors hit record numbers in 2024. The number of SEC-registered firms rose to 15,870, total AUM gained 12.6% to reach $144.6 trillion, and both client numbers (68.4 million) and employment (1.03 million non-clerical employees) hit all-time highs.
So the industry isn't shrinking. It's splitting. Large, SEC-registered firms are growing at a record pace, fueled by market appreciation and M&A activity, while the small, state-registered market is contracting in firm count but concentrating assets among the remaining players.
South Carolina's enforcement priorities align closely with NASAA's national agenda.
In 2024, state securities regulators collectively investigated 8,833 cases and initiated 1,183 enforcement actions, resulting in over $190 million in restitution and $69 million in fines. The top enforcement triggers for state-registered RIAs specifically were failure to register and "fiduciary shortfalls."
For 2025, NASAA identified digital assets and tech-based schemes as the top investor threats. South Carolina is implementing this priority directly, as shown by its enforcement actions against cryptocurrency firms.
On June 6, 2024, the SC Securities Division filed a consent order against Plutus Financial Holdings and related entities regarding its "Abra Earn" and "Abra Boost" products. The Division alleged the firms were offering and selling unregistered securities in South Carolina and making untrue statements or omitting material facts.
This wasn't a small action. As of June 2023, 507 investors in South Carolina held about $2,062,279 in these assets.
The takeaway here is clear. If you're recommending crypto-staking or interest-bearing digital asset products, South Carolina regulators are likely to view that as recommending an unregistered security. The burden of proof will be on you to show otherwise.
Compliance for a South Carolina RIA is precise, technical, and continuous. The good news is that the state provides the full text of its examination playbook and expects you to follow it.
A few things to keep in mind:
Your compliance manual is your defense. The state has given you the answers. Build a manual that maps directly to the key regulations, especially on capital requirements, recordkeeping, and ethical conduct.
Document your suitability inquiries. The most common citable offense is a suitability failure, which is defined as failing to make and document a reasonable inquiry into a client's objectives and needs before a recommendation. Your client files need to prove this inquiry happened.
Digital assets are a red flag. The 2024 Plutus enforcement action is a warning. Recommending crypto products will likely be viewed as recommending an unregistered security unless you can demonstrate otherwise.
Continuing education isn't optional. The IAR CE requirement is in full effect. If you don't comply, you'll get a public "CE Inactive" status and eventually won't be able to renew.
The market is consolidating fast. Small firms are being acquired or squeezed out. Operating efficiently with a clear business strategy is more important than ever.
Running a compliant RIA while also managing your clients and growing your business requires constant attention to regulatory details. Marketing compliance is one area where the burden has grown, especially as regulators increase scrutiny of digital communications and social media. Reviewing every piece of marketing content manually to ensure it meets state and SEC standards takes significant time and expertise.
That's where technology can actually help. Luthor is an AI-based tool that automatically reviews marketing assets for compliance, which can reduce the risk, effort, and time it takes to handle marketing compliance at scale. If you're looking for ways to streamline your compliance workflow without compromising quality, you might want to see how this type of solution could fit into your operations. You can request a demo to learn more about how automated compliance review works in practice.
The South Carolina Securities Division operates as an accessible but exacting regulator. It provides clear rules and expects you to follow them. Building a solid compliance foundation now will save you a lot of headaches later.