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Launching a Registered Investment Advisor firm in Vermont can be a rewarding venture, but the state's specific compliance landscape is probably one you'll need to understand well before you start. This guide is designed for financial advisors seeking independence, existing RIA firms expanding their operations into Vermont, and compliance officers who are managing state-level registration and ongoing requirements.
You'll learn about the entire RIA registration process in Vermont, all the fees you'll need to pay in 2024-2025, what ongoing compliance actually means in practice, and some common deficiencies the regulator cares about.
In Vermont, all investment advisers, broker-dealers, and their representatives are regulated by the Securities Division of the Vermont Department of Financial Regulation (DFR). The DFR Securities Division has a stated mission to "protect Vermonters from investment fraud" while also promoting "the development of Vermont's capital markets."
So, here's something interesting. While the national investment adviser industry has seen record growth (reaching $144.6 trillion in assets under management across 15,870 firms in 2024), the Vermont market is notably more concentrated. As of December 31, 2023, there were only 32 state-registered Investment Adviser firms with their home state in Vermont.
This small number of registrants doesn't imply a relaxed regulatory environment. Actually, it creates a "high-touch" domicile where each firm is highly visible. The DFR's vision statement includes a goal to "maintain a visible presence in the small business community," which confirms this. Unlike larger states, an RIA in Vermont can expect a direct and personal relationship with the regulator. This presents both an opportunity for accessible guidance (the DFR aims for "sensible and flexible" regulation) and a challenge, because firms can't really "fly under the radar." Compliance must be precise from the initial filing.
Determining registration jurisdiction (whether with the state DFR or the federal SEC) depends on AUM, client location, and place of business.
The primary jurisdictional test is AUM. Generally, advisory firms with under $100 million in AUM register with the state securities regulator, which in this case is the Vermont DFR. Firms with AUM exceeding $100 million must typically register with the U.S. Securities and Exchange Commission (SEC), though they're still required to "notice file" with any state in which they transact business. If you're approaching that threshold or planning for growth, understanding SEC compliance software options becomes important.
It's critical for firms to monitor this rule, because the $100 million threshold, which has been static since 2012, is now under review. In April 2025, SEC officials signaled that staff has been directed to evaluate increasing this AUM threshold. Should this change be adopted (to maybe $200 million or $250 million), many mid-sized firms currently registered with the SEC would be forced to de-register and transition to state registration. This potential "re-state-ification" of compliance would move firms from a single federal regulator to dozens of state regulators, making an understanding of Vermont's specific rules a vital future-proofing exercise.
For out-of-state advisors that don't have a place of business in Vermont, the state provides a "de minimis" exemption. An advisor isn't required to register with the DFR as long as the firm has five or fewer clients who are residents of Vermont within a 12-month period. Registration is triggered upon the acquisition of the sixth Vermont client.
The "de minimis" exemption is immediately nullified if the firm establishes a "place of business" in Vermont. This is probably the most significant registration trigger for out-of-state firms, particularly in an era of remote work.
Vermont's regulations define a "place of business" broadly to include not just a traditional office but also "any other location that is held out to the general public as a location at which the investment adviser solicits, meets with, or otherwise communicates with customers or clients."
The DFR provided critical, modern clarification on this point in its April 2, 2025 Securities Bulletin (S-2025-01). The bulletin poses a direct question: "If an investment adviser has its main office outside of Vermont, but it employs an IAR who primarily works remotely from a home office in Vermont, is the investment adviser required to register in Vermont?"
The DFR's official answer is "Yes."
The bulletin explicitly states there's no de minimis client exemption for firms with a place of business in Vermont. This means a single Investment Adviser Representative working from their home in Burlington is considered a "place of business" and forces the entire advisory firm (a Boston or New York-based RIA, for example) to register in Vermont, even if that representative has zero Vermont-based clients.
The registration process is managed through the state but filed via a national online system.
Before initiating the registration, the firm must be established as a formal legal entity (LLC, S-Corp, C-Corp, for example) by filing formation documents with the Vermont Secretary of State. The DFR will require a copy of the "certificate of formation/articles of incorporation" as part of the application process.
All RIA registrations are filed electronically through the Investment Adviser Registration Depository (IARD), which is operated by FINRA on behalf of the state regulators and the SEC.
Form ADV Part 1: This is the online portion of the application containing the firm's core business information, including ownership, AUM, client types, services, and disciplinary history.
Form ADV Part 2 (A and B): This is the firm's client-facing disclosure "brochure." Part 2A details the firm's services, fee schedule, and conflicts of interest. Part 2B (the "brochure supplement") provides the educational and professional background of the individuals who provide advice.
Each individual who provides investment advice on behalf of the RIA firm must be registered as an Investment Adviser Representative. This is done by electronically filing a Form U4 through the Central Registration Depository (CRD) system, which is linked to IARD.
As part of the IAR registration, applicants must demonstrate competency by meeting one of the following examination requirements:
A passing score on the Series 65 (Uniform Investment Adviser Law Examination), OR passing scores on both the Series 7 (General Securities Representative) AND the Series 66 (Uniform Combined State Law Examination).
Vermont will waive this examination requirement for individuals who currently hold and maintain in good standing one of the following professional designations: Certified Financial Planner (CFP), Chartered Financial Analyst (CFA), Chartered Financial Consultant (ChFC), Personal Financial Specialist (PFS), or Chartered Investment Counselor (CIC).
All registration and renewal fees must be paid via the IARD/CRD system.
Filing the Form ADV through IARD isn't the final step. The Vermont DFR will consider an application "incomplete" until a separate package of state-specific documents is submitted directly to the Securities Division.
As of 2024-2025, the required submissions for a new RIA application in Vermont include:
The requirement to provide proof of a cybersecurity insurance policy is a significant and advanced mandate. It moves beyond a simple procedural check ("do you have a policy?") and demands tangible, financial-level proof of preparation. This indicates the DFR views cybersecurity as a core component of an RIA's financial soundness and fiduciary duty to protect investors. This focus is further underscored by the DFR's March 20, 2025 "Unregistered Third-Party Digital Platforms Alert," which explicitly warns advisers about performing due diligence on their technology vendors. New firms should prepare their full technology and vendor due diligence documentation (policies, insurance, and review processes) before submitting their application.
When preparing these documents, it's worth noting that maintaining compliance with all these marketing and disclosure requirements can be time-consuming. Luthor's AI-powered compliance review can help you catch potential issues in your advisory agreements and marketing materials before submission, reducing the risk of application delays.
The following summarizes the fees for RIA and IAR registration in Vermont. These fees were updated and became effective on July 1, 2024, and are the current fees for 2024-2025.
Initial RIA Firm Registration: $300
Initial IAR Registration: $40
Annual RIA Firm Renewal: $300
Annual IAR Renewal: $50
Branch Office Registration: $100
Late Renewal Fee (both RIA and IAR): $100
Registration is only the beginning. RIAs in Vermont are subject to rigorous ongoing compliance and supervision by the DFR. Managing these RIA compliance requirements effectively is critical for maintaining your registration.
All registered firms must file an annual amendment to their Form ADV. This amendment must be filed within 90 days of the firm's fiscal year-end.
All RIA firm and IAR registrations in Vermont expire on December 31st of each year. Firms must pay annual renewal fees through the IARD system to maintain their registration for the following year. The renewal program typically begins in November for the upcoming year.
Firms must maintain, enforce, and annually review a WSP tailored to the firm's business and Vermont's specific regulations. The DFR has highlighted several emerging risks that must be addressed in a firm's WSP:
SEC Marketing Rule: Vermont has incorporated the SEC's new Marketing Rule, which allows for the use of testimonials and endorsements.
Solicitor Rules (Key Vermont Difference): The DFR's April 2025 bulletin (S-2025-01) points out a critical difference between state and federal rules. The SEC's rule includes a "de minimis compensation" exemption, which waives the written agreement requirement for solicitors paid $1,000 or less. Vermont law doesn't have this exemption. In Vermont, any compensation for a referral or testimonial, including non-cash benefits, requires a formal written solicitor agreement.
Digital Platforms: The DFR's March 20, 2025 alert warns advisers to conduct and document their due diligence on any unregistered third-party digital platforms they use.
Many firms find that staying on top of these evolving marketing compliance requirements is a full-time job in itself. RIA compliance software like Luthor can automate the review of marketing materials against current regulations, ensuring your testimonials, endorsements, and digital content remain compliant as rules change.
Firms must maintain all required books and records as specified by Vermont's securities regulations. This includes (but isn't limited to) client communications, trade records, financial statements, and compliance documents. These records must be made available for examination by the DFR Securities Division.
Vermont imposes minimum net worth requirements, which can be satisfied with firm capital or by posting a surety bond for any deficiency:
No Discretion or Custody: The firm must maintain a positive net worth
Discretionary Authority Only: The firm must maintain a minimum net worth of $10,000
Custody of Client Assets: The firm must maintain a minimum net worth of $35,000
An exemption to these requirements exists: they don't apply if the RIA maintains its principal place of business in another state and is fully compliant with that state's net worth rules.
Vermont has adopted the NASAA Investment Adviser Representative Continuing Education (IAR CE) Model Rule. All registered IARs must complete 12 total CE credits annually to maintain their registration. The 12 credits must consist of 6 credits of "Products and Practices" and 6 credits of "Ethics and Professional Responsibility."
While national averages can range from 45 to 90 days, Vermont's regulations provide a specific statutory timeline. A registration application will be deemed effective 45 calendar days after the applicant files a complete application, unless the commissioner approves it earlier. An application isn't considered "complete" until the DFR has received all required state-specific documents and all deficiencies have been resolved.
Yes. For an out-of-state RIA that has no "place of business" in Vermont, the firm is exempt from registration as long as it has five or fewer clients residing in the state.
An IAR applicant must have passed either the Series 65 exam OR both the Series 7 and Series 66 exams. This requirement is waived for individuals who hold a CFP, CFA, ChFC, PFS, or CIC designation in good standing.
No, but this question identifies a common compliance pitfall. A firm must register if it has any "place of business" in the state. As clarified in the DFR's April 2025 guidance, the state explicitly defines a "place of business" to include an IAR who primarily works remotely from a home office in Vermont. So, hiring a single remote employee in Vermont triggers the full firm registration requirement.
Getting Vermont RIA registration right requires a nuanced understanding that goes beyond national standards. The state presents a "high-touch" regulatory environment where (due to the small number of registrants) firms are highly visible.
This visibility is paired with a regulator that has enacted specific, advanced rules. Key areas of focus for the DFR include remote work (the 2025 "place of business" guidance makes hiring remote workers a primary registration trigger), cybersecurity (the unique requirement for proof of a cybersecurity insurance policy during registration demonstrates a deep focus on tech risk), and solicitor rules (Vermont's stricter interpretation of solicitor compensation, which doesn't allow for the SEC's "de minimis" exemption, narrows the compliance path for referrals).
The importance of expert compliance is underscored by the DFR's recent and active enforcement record. This isn't a passive regulator. Despite overseeing a small number of in-state firms, the DFR is highly active in complex, national-level enforcement actions.
In February 2024, the DFR joined a $1.5 million multi-state settlement with TradeStation Crypto, Inc. for the unregistered offer and sale of securities. Throughout 2024 and 2025, the DFR has issued consent orders against some of the industry's largest players, including Third Eye Associates (December 2024), The Vanguard Group (March 2025), and Edward D. Jones & Co., L.P. (December 2024 and October 2025).
The DFR's willingness to engage in complex crypto cases and pursue actions against major national firms demonstrates that no RIA, regardless of size, is exempt from scrutiny.
If you're managing RIA compliance in Vermont (or planning to expand into the state), you probably already know that staying on top of all these requirements is quite a bit of work. Between the initial registration documents, ongoing marketing compliance, the unique solicitor rules, and the cybersecurity requirements, there's a lot to keep track of.
Luthor's AI-powered compliance platform is designed to help RIAs reduce the time, effort, and risk involved in marketing compliance. From reviewing your Form ADV disclosures to checking your marketing materials against Vermont's specific rules (like those stricter solicitor requirements), Luthor helps you catch potential issues before they become problems. Request demo access to see how Luthor can help your firm manage compliance at scale while staying focused on serving your clients.