How to Register an RIA in Texas: Compliance Guide

Launching a Registered Investment Advisor firm in Texas presents a significant opportunity, but the state's compliance landscape is something you need to take seriously from day one. There's no way around it. The Texas market is massive, and with that size comes scrutiny that's quite a bit more intense than what you'd find in smaller states.

The numbers tell the story pretty clearly. As of December 31, 2024, Texas ranked first nationally for total state-registered IA firms at 4,618, and also first for SEC-notice filed firms at 8,016. The state came in second for home-state RIAs with 1,370 firms and third for home-state SEC-filed firms at 1,031. So you're looking at a state that's both a popular home base and a major target market for advisors nationwide.

What makes Texas attractive is the same thing that makes its regulatory approach so demanding. The state's rapid economic and population growth means the regulator has necessarily adopted a more proactive posture than you might encounter elsewhere. This creates a dynamic where immense opportunity comes paired with high scrutiny. You can't just view Texas as a large market. You need to approach it as a jurisdiction where meticulous preparation is essential for getting in and staying viable long-term.

This guide is designed for financial advisors considering independence, existing RIAs planning to expand into Texas, and compliance officers managing state-level obligations. We'll cover the entire RIA lifecycle in Texas, from initial registration triggers and processes to ongoing compliance mandates and enforcement realities. In Texas, RIAs are regulated by the Texas State Securities Board, an agency with a stated mission to protect Texas investors and a well-earned reputation for thorough application reviews and enforcement of the Texas Securities Act.

Who is Required to Register as an RIA in Texas?

Whether you need to register with the TSSB depends on several factors, including assets under management, client location, and physical presence. Texas has specific rules that differ from national standards, so there are potential compliance traps if you're not careful.

Assets Under Management (AUM) Threshold

The primary factor for state versus federal registration is AUM. Following the Dodd-Frank Act, which shifted oversight of smaller advisors to the states, firms with less than $100 million in AUM are generally prohibited from registering with the SEC and must register with appropriate state regulators.

There's a buffer zone to prevent firms from having to switch regulators due to minor market fluctuations. Firms with AUM between $100 million and $110 million may choose to register with either the SEC or the state. Firms managing over $110 million are generally required to register with the SEC and will then "notice file" in states like Texas where they have clients or a place of business.

The "De Minimis" Anomaly: A Critical Texas Compliance Trap

Most states follow a national de minimis standard, which allows an out-of-state RIA to serve a small number of clients (typically five or fewer in a 12-month period) without triggering registration, provided the firm has no place of business in that state.

Texas does not have a de minimis exemption. This is a critical distinction that trips up out-of-state advisors all the time. Instead of an exemption, Texas requires an out-of-state RIA to file a "limited registration" with the TSSB before taking on its very first client in the state. This limited registration permits the firm to advise up to five Texas clients. Before onboarding a sixth client, the firm must transition to full registration. This requirement applies to both state-registered firms and the Investment Adviser Representatives of SEC-registered firms.

This isn't just a procedural difference. It reflects a regulatory philosophy. By mandating a filing before the first client is engaged, the TSSB shifts from reactive to proactive oversight. This approach provides the agency with immediate jurisdiction and visibility over any firm advising Texas residents, regardless of size. It signals the TSSB's position that every Texas investor is entitled to full protection of the state's securities laws and that no advisory activity should occur outside of its regulatory view. This has real operational consequences for national RIAs, which must modify their standard five-client threshold policies specifically for Texas and Louisiana, the other state that rejects the de minimis standard.

Place of Business

The requirement to register is clear if you have a physical presence in the state. Establishing a place of business in Texas automatically triggers the requirement to register with the TSSB, regardless of AUM (as long as it's below the SEC registration threshold) or number of clients. The definition of "place of business" is broad, covering not just a formal office but any location from which the adviser regularly provides investment advisory services, solicits, meets with, or otherwise communicates with clients.

The Texas RIA Registration Process: A Step-by-Step Guide

The registration process in Texas is known for being meticulous. The TSSB conducts a stringent review of all application materials, and success requires careful preparation and submission of all required documentation.

1. Form a Legal Entity

Before starting the registration process, your advisory firm must be legally established as a business entity, such as a Limited Liability Company or a corporation (like an S-Corp). The TSSB requires submission of official formation documents, such as certified Articles of Incorporation or a signed Operating Agreement, as part of the application package.

2. File Form ADV Part 1 and Part 2 through IARD

All RIA registrations are processed through the Investment Adviser Registration Depository, an online system operated by FINRA on behalf of state and federal securities regulators.

Form ADV Part 1 is completed electronically through the IARD system. It contains quantitative and check-the-box information about your firm's business practices, ownership structure, client base, employees, affiliations, and any disciplinary history.

Form ADV Part 2 (The Brochure) is a narrative, client-facing disclosure document. It must be written in plain English and detail the firm's services, fee structures, conflicts of interest, risk factors, and the educational and business backgrounds of key advisory personnel. You create this document and upload it as a PDF file to the IARD system.

3. Register Investment Adviser Representatives (IARs)

Every individual who provides investment advice to Texas clients on behalf of the RIA must be registered as an IAR. This is done by filing a Form U4 through the Central Registration Depository system, which is linked to IARD.

Exam Requirements: To qualify for registration in Texas, an IAR applicant must have passed either the Uniform Investment Adviser Law Examination (Series 65) or the combination of the General Securities Representative Examination (Series 7) and the Uniform Combined State Law Examination (Series 66).

Exam Waivers: The examination requirement is waived for individuals who hold one of the following professional designations in good standing: Certified Financial Planner, Chartered Financial Analyst, Chartered Financial Consultant, Personal Financial Specialist, or Chartered Investment Counselor. As of March 13, 2025, the TSSB also recognizes NASAA's Exam Validity Extension Program and FINRA's Maintaining Qualifications Program, which allow individuals to maintain their exam qualifications for longer periods while not actively registered.

4. Pay State Filing Fees

All registration and renewal fees are paid electronically through your firm's IARD Flex Funding Account. You need to make sure your account is funded before submitting filings.

5. Submit Texas-Specific Documents

Besides the electronic filings via IARD, the TSSB requires a set of documents to be submitted directly to its staff, usually via email to submissions@ssb.texas.gov. These documents must be provided at the same time as the IARD submission and include:

• Certified Articles of Incorporation or other business formation documents
• The firm's By-Laws or Operating Agreement
• A Balance Sheet prepared according to U.S. GAAP, dated within 90 days of the filing date, accompanied by the Certification of Balance Sheet by Principal Financial Officer (Form 133.18). An audited balance sheet is generally only required if the firm will have custody of client assets
• A copy of the firm's standard client advisory agreement(s)
• A complete schedule of advisory fees
• The firm's Written Supervisory Procedures, also known as a Compliance Manual

Texas RIA Registration and Filing Fees

Understanding regulatory costs is key for launching a new RIA. Here's what you need to budget for with the Texas State Securities Board:

Initial Firm Registration Fee: $75

Initial IAR Registration Fee: $35 per representative

Annual Firm Renewal Fee: $75 (paid in Q4)

Annual IAR Renewal Fee: $35 (paid in Q4)

Fees are processed through your firm's IARD account. FINRA may charge separate system processing fees.

Ongoing RIA Compliance Requirements in Texas

Registration isn't a one-time event. It's the beginning of a continuous obligation to stick to state regulations. The TSSB expects firms to maintain a strong compliance program to protect clients and ensure market integrity.

Annual Form ADV Update

Every RIA must file an annual updating amendment to its Form ADV through the IARD system. This filing is due within 90 days of the firm's fiscal year-end and serves to update all information on the form, keeping it accurate. Understanding broader RIA compliance requirements beyond just Texas-specific rules can help you build a more comprehensive compliance framework.

Annual Renewal

All RIA firm and IAR registrations in Texas expire on December 31st each year. To continue operating, firms must process their renewals through the IARD/CRD system during the annual renewal period, which typically opens in November and has a deadline in December. If you don't renew on time, your registration will be terminated.

Compliance Manual/Written Supervisory Procedures (WSP)

Texas law requires that RIAs maintain and enforce a written system of supervision. Texas Administrative Code §116.10 states that each RIA "shall establish, maintain, and enforce a system to supervise the activities of its investment adviser representatives that is reasonably designed to achieve compliance with the Texas Securities Act, Board rules, and all applicable securities laws and regulations." This WSP must be tailored to your firm's specific business model and should cover key areas including:

Code of Ethics: A foundational document that sets forth the firm's fiduciary standards and addresses conflicts of interest and personal securities trading by employees.

Cybersecurity Policy: TAC §116.23 requires RIAs to notify the Securities Commissioner of certain cybersecurity incidents affecting Texas clients. A comprehensive policy for identifying, responding to, and mitigating cyber threats is a regulatory necessity. Given the pace of technological change and the increasing sophistication of threats, maintaining an updated cybersecurity framework is something you need to prioritize. RIA compliance software can help streamline the review process for compliance-heavy materials, allowing you to focus resources on implementing strong security measures rather than getting bogged down in manual reviews.

Business Continuity Plan: Procedures designed to ensure the firm can continue to operate and serve clients during a significant business disruption, such as a natural disaster or technology failure.

Privacy Policy: Procedures to keep clients' non-public personal information safe in compliance with federal and state privacy laws.

Advertising and Marketing: As of March 13, 2025, TAC §116.15 adopts the SEC's modern Marketing Rule by reference. This allows Texas-registered RIAs to use testimonials and endorsements, but it also requires strict disclosure, oversight, and record-keeping that must be reflected in the WSP. Marketing compliance can be particularly challenging when you're trying to scale, and automated SEC compliance software can reduce both the risk and time involved in getting materials approved.

Books and Records Requirements

The state's record-keeping rules are extensive. TAC §116.5 details the specific books and records that RIAs must create and maintain. This includes journals of original entry, general ledgers, memoranda of each securities order, and detailed client records documenting their financial situation, investment objectives, and risk tolerance. These records must generally be kept for five years, with the first two years in an easily accessible location. What's more, TAC §116.7 grants the TSSB the authority to examine a firm's books and records without prior notice.

Financial Requirements

For RIAs that don't have custody of client funds or securities, Texas doesn't impose a specific minimum net worth requirement. But the TSSB does require all registered firms to be "financially solvent" and will review the firm's balance sheet during the initial application and later examinations to verify financial stability. Firms that do have custody of client assets or that require prepayment of advisory fees of more than $500, six months or more in advance, are subject to much stricter financial requirements, including the need to provide audited financial statements. Understanding RIA custodians and their role in compliance can be helpful when setting up your firm's operational structure.

Spotlight on Enforcement: The Cost of Non-Compliance

Compliance with these rules isn't optional, and the consequences of failure can be severe. Nationally, state regulators are highly active. In 2024, state securities regulators opened 345 investigations into unregistered firms and 944 into unregistered individuals, which resulted in 100 enforcement actions against investment advisory firms and 78 against IARs. The most common deficiencies leading to enforcement actions include failure to register, improper fee practices, and inadequate compliance policies and procedures.

The TSSB's public enforcement records confirm that these national trends play out in Texas. Recent administrative actions against investment advisers provide clear examples of the regulatory risks:

• October 2025: An order was issued involving the registration of Smith Wealth Advisors, LLC
• August 2025: A Cease & Desist and Undertaking was entered into with The Vanguard Group, Inc., a major national firm, showing that no firm is immune from state oversight
• April 2025: A suspension and Cease and Desist Order was issued against Advue Capital, LLC
• March 2025: A Reprimand and Fine was issued against Waits Investments, LLC, and a separate Reprimand, Fine, and Undertaking was issued against San Antonio Wealth, LLC

These public enforcement actions serve a dual purpose. Beyond being a warning, they provide a "roadmap in reverse" for compliance professionals. The rules in the Texas Administrative Code state what an RIA should do, while enforcement actions show what happens when firms fail to do it. By looking at the types of violations most frequently cited by the TSSB (such as registration failures, inadequate supervision, or improper fees), firms can identify the regulator's key priorities and areas of highest risk. This allows compliance resources and internal audits to be focused on the areas of greatest regulatory concern.

Frequently Asked Questions about Texas RIA Compliance

How long does it take to get registered as an RIA in Texas?

While the SEC has a statutory 45-day window to act on an application, the state-level process often takes longer because of the depth of the review. General industry estimates for RIA registration range from 45 to 90 days from start to finish. Given that Texas is known for particularly thorough and multi-round reviews, you should probably budget for a timeline of 60 to 90 days. This timeframe can stretch out if your application is incomplete, inconsistent, or raises questions that need follow-up from TSSB examiners.

Does Texas have a "de minimis" exemption?

No. This is one of the most important compliance distinctions for Texas. Unlike most states, Texas doesn't recognize a de minimis exemption for out-of-state advisors. A firm must complete a "limited registration" with the TSSB before advising its first Texas-based client. This limited registration covers firms with five or fewer clients in the state.

What are the exam requirements for IARs in Texas?

An Investment Adviser Representative must pass either the Series 65 exam or the combination of the Series 7 and Series 66 exams. This requirement is waived for individuals who hold one of the following professional designations: CFP, CFA, ChFC, PFS, or CIC.

Do I need a physical office in Texas to register?

No, a physical office isn't required for registration. But the registration triggers work in two ways. If a firm has a place of business in Texas, it must register with the state (assuming AUM is below the SEC threshold). On the flip side, an out-of-state firm with no physical presence in Texas but with even one Texas client must also register (via the limited registration process), showing that a physical office isn't the only trigger for registration.

Final Thoughts

The Texas investment advisory market is one of the largest and most promising in the United States. But that opportunity is matched by a regulatory environment that's among the nation's most demanding. Success here isn't just about investment acumen. It requires a proactive, detailed, and consistent commitment to compliance. From understanding the state's unique "no de minimis" rule to establishing and maintaining strong supervisory procedures and meticulous records, you need to build your operations on a solid regulatory foundation.

Managing compliance at scale can feel overwhelming, especially when you're dealing with marketing materials, client communications, and the documentation required to satisfy TSSB standards. The manual review process for compliance-heavy content often becomes a bottleneck, slowing down business development and straining internal resources. This is where automation can make a real difference.

Luthor is an AI-based tool that allows you to automatically review marketing assets for compliance. You can reduce the risk, effort, and time needed to handle marketing compliance at scale with Luthor. For Texas RIAs managing the state's strict advertising and disclosure requirements under the new Marketing Rule, having a system that flags potential issues before they become problems can be a practical solution worth considering. If you're interested in seeing how it works, you can request demo access to explore whether it fits your firm's needs.

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