West Virginia RIA Compliance & Registration Explained

Launching a Registered Investment Advisor firm in West Virginia can be rewarding, but the state's compliance requirements are pretty detailed. If you're a financial advisor thinking about going independent, or maybe you're expanding your existing firm into the state, you need to know what you're getting into.

This guide walks through everything from registration to ongoing compliance requirements. We'll cover the fees, the forms, the ongoing obligations, and some of the common pitfalls that trip up advisors during examinations.

In West Virginia, RIAs are regulated by the Securities Commission, which operates within the State Auditor's Office. This placement is kind of unique compared to other states. The State Auditor is the state's chief financial inspector, so you can expect the Securities Commission to take financial accountability pretty seriously.

Who is Required to Register as an RIA in West Virginia?

The first question you need to answer is whether you're required to register at all. The main factor here is your Assets Under Management, but there are a few other considerations too.

Assets Under Management Threshold

If you're managing less than $100 million in client assets, you'll generally register with West Virginia rather than the SEC. Once you cross that threshold, you typically move to federal registration. It's a pretty clear dividing line in most cases.

The De Minimis Rule

West Virginia has what's called a de minimis exemption for out-of-state advisors. If you don't have a physical office in the state and you're working with five or fewer West Virginia residents over any twelve-month period, you don't need to register. The exemption is self-executing, which means you don't file anything to claim it.

But here's something important to keep in mind. The moment you take on that sixth client, you're required to be registered. The registration process can take up to 30 days, so if you wait until client number six walks in the door, you're probably going to end up doing business while you're technically not in compliance. A smarter approach is to start the registration process when you onboard your fifth West Virginia client.

Place of Business

If you have a physical office in West Virginia, you need to register regardless of how many clients you have. This applies even if you're primarily registered with the SEC as a federal-covered adviser. Your Investment Adviser Representatives who work out of that West Virginia office will also need state registration.

The West Virginia RIA Registration Process: A Step-by-Step Guide

Registration isn't a single form you fill out and forget about. It's a multi-step process that requires gathering documents, passing exams, and demonstrating you have proper compliance systems in place before you start doing business.

Form a Legal Entity

You need a formal business structure. Most advisors set up an LLC or S-Corporation, but the key point is you can't just operate as an unregistered sole proprietor using your personal name.

File Form ADV Part 1 and Part 2 through IARD

All registration happens through the Investment Adviser Registration Depository system, which is run by FINRA but used by state regulators. You'll need to get set up in the system before you can file anything.

Form ADV has two main parts that serve different purposes. Part 1 is the check-the-box section where you disclose factual information about your business structure, your assets under management, your fee arrangements, and any disciplinary history. Part 1B has additional questions specific to state-registered advisors.

Part 2 is your client-facing brochure. This needs to be written in plain English and delivered to every client. It describes your services, your fees, how you're compensated, your investment strategies, the risks involved, and any conflicts of interest. You upload this as a PDF through the IARD system.

Part 2B is the brochure supplement. You create one for each person at your firm who provides investment advice. It includes their education, their work history for the past five years, any professional designations they hold, outside business activities, and disciplinary events.

Register Investment Adviser Representatives

Each individual who gives investment advice needs to register using Form U4. This form asks about their background, employment history, and whether they've had any regulatory issues or customer complaints.

Your IARs also need to meet West Virginia's competency requirements. They can do this by passing the Series 65 exam, or by passing both the Series 66 and Series 7. There's also a waiver if they hold certain professional designations in good standing, like CFP, CFA, ChFC, PFS, or CIC.

Pay State Filing Fees

West Virginia's fee structure is laid out in the state code. According to WV Code §32-2-202, the initial firm registration is $200. Each IAR registration costs $75. If you have branch offices in the state, there's a $60 fee per location. There's also a compliance assessment fee of $30 for initial registrations and $12 for renewals.

Some compliance websites list different amounts for IAR fees, but those figures probably include FINRA's processing fees on top of the state fees. The state statutory fee is $75.

Submit State-Specific Documents

West Virginia expects you to have a complete compliance infrastructure in place before you start advising clients. You'll need written client advisory agreements that comply with state law. You need a comprehensive Policies and Procedures Manual that covers supervision, client complaints, training, your Business Continuity Plan, cybersecurity protocols, proxy voting if applicable, and insider trading policies.

You also need a Privacy Policy that explains how you handle client information. This gets delivered to clients when you start working with them and then annually after that.

A Code of Ethics is mandatory. This document sets the standard of conduct for everyone at your firm and addresses conflicts like personal securities trading.

You'll file a Form U-2, which appoints the state securities administrator as your agent for receiving legal papers. And you need to submit financial statements, including a balance sheet and income statement prepared within 45 days of your filing date if you're a new firm.

West Virginia RIA Registration and Filing Fees

Let me break down the fees so it's clear what you'll pay:

Initial Firm Registration: $200

Annual Firm Renewal: $200

Initial IAR Registration: $75 per person

Annual IAR Renewal: $75 per person

Branch Office Fee: $60 per location in West Virginia

Compliance Assessment (Initial): $30

Compliance Assessment (Renewal): $12

These are the statutory amounts from the West Virginia Code. You'll also pay separate fees to FINRA for using the IARD system, but those aren't state fees.

Ongoing RIA Compliance Requirements in West Virginia

Getting registered is just the beginning. Staying compliant means meeting ongoing obligations throughout the year.

Annual Form ADV Update

You need to file an annual amendment to your Form ADV within 90 days after your fiscal year ends. This keeps your registration information current. Even if nothing has changed, you still file the annual amendment.

Renewal

All registrations expire on December 31st each year. You renew through the IARD system by paying your renewal fees before the deadline. If you miss the deadline, your registration lapses and you can't do business in the state until you're registered again.

Material Updates Throughout the Year

If anything material changes between annual updates, you need to file a correcting amendment promptly. Material changes include things like a new address, changes in ownership, changes to your fee structure, new custody arrangements, or disclosure of a disciplinary event. West Virginia Code §32-2-203 requires prompt filing when information becomes inaccurate or incomplete.

Compliance Manual and Written Supervisory Procedures

Your Policies and Procedures Manual is your central compliance document. It needs to be tailored to your actual business, not just a generic template you downloaded. Key sections should cover your Code of Ethics, cybersecurity policies, your Business Continuity Plan, privacy procedures, and how you handle client complaints. Understanding RIA compliance requirements across different jurisdictions can help you build a more comprehensive program.

For firms evaluating their marketing materials, tools like Luthor can help streamline the compliance review process for advertisements and communications before they're submitted to the state.

Books and Records Requirements

You're required to maintain detailed records of your business activities. The statute requires three years of retention for most records, though some need to be kept longer. Records you must maintain include journals of cash receipts and disbursements, general ledgers, order tickets, copies of all written communications relating to investment advice, records of personal securities transactions by you and your IARs, copies of client advisory agreements, client suitability information, and copies of any advertisements or marketing materials distributed to ten or more people.

The state can examine these records at any time. West Virginia accepts compliance with SEC Rule 204-2 as meeting this requirement, so following the federal recordkeeping rule is a safe approach.

Financial Requirements

If you have custody of client funds or securities, or if you have discretionary authority over client accounts, you must maintain a minimum net worth of $25,000. If your net worth falls below this amount, you can post a $10,000 surety bond instead. The state provides a specific bond form for this purpose.

Cybersecurity and Business Continuity Planning

Protecting client data is part of your fiduciary duty. While West Virginia doesn't have a super detailed, prescriptive cybersecurity statute for RIAs, the state is a member of NASAA, and examiners will likely use NASAA's Model Rule on Cybersecurity as their benchmark.

Your compliance manual should include a cybersecurity policy that covers risk identification, system protection, threat detection, incident response, and data recovery. You need to think about how you'll handle a ransomware attack or a data breach.

Your Business Continuity Plan needs to address data backup and recovery for both paper and electronic records, protection of critical systems, alternative ways to communicate with clients and regulators during an emergency, alternate work locations if your office becomes unavailable, and how you'll give clients prompt access to their funds if your firm can't continue operating.

Advertising Pre-Clearance Requirement

Here's something that catches a lot of advisors off guard. West Virginia Code §32-4-403 requires you to file advertising materials with the Securities Commission before you use them. This includes websites, social media posts, brochures, letters, and any other marketing communications.

This pre-filing requirement means you can't just post something on LinkedIn on a whim. Your marketing and compliance functions need to work together closely. Given the volume of content some advisors produce, RIA compliance software can help manage the workload of reviewing and preparing submissions to meet this requirement.

Frequently Asked Questions about West Virginia RIA Compliance

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

The Securities Commission indicates the process can take up to 30 days once you've submitted a complete application. That's why you should start the process before you actually need to be registered, especially if you're approaching the de minimis exemption limit.

Does West Virginia have a de minimis exemption?

Yes. If you have no physical office in the state and you work with five or fewer West Virginia residents during any 12-month period, you don't need to register. The exemption is automatic. But once you get that sixth client, you need to be registered before you start advising them.

What are the exam requirements for IARs in West Virginia?

Your IARs need to pass the Series 65 exam, or the Series 66 combined with the Series 7. The exam requirement is waived if they hold a CFP, CFA, ChFC, PFS, or CIC designation in good standing.

Do I need a physical office in West Virginia to register?

No. You can register without having an office in the state. But if you do have a physical office location, you need to register and pay the branch office fee, even if you're primarily SEC-registered.

What happens if I have custody of client assets?

You'll need to maintain a $25,000 minimum net worth or post a $10,000 surety bond. You'll also face heightened scrutiny during examinations to make sure client assets are properly segregated and protected.

What are the most common deficiencies found during exams?

Based on NASAA's coordinated exam data, the most frequent issues are inconsistencies between Form ADV Part 1 and Part 2, failure to maintain complete client suitability information, missing signatures on advisory contracts, and fee discrepancies between what's disclosed in Form ADV and what's actually charged to clients.

Enforcement Trends and What They Mean for Your Firm

Understanding what regulators are focused on helps you know where to strengthen your compliance program. In 2023, state securities regulators opened 343 cases involving digital assets and 205 cases involving social media fraud. That tells you the Securities Commission is probably paying close attention to how you use technology and social media in your practice.

A recent case from West Virginia demonstrates how seriously the state takes securities violations. Theodore Miller, who called himself the "Wolf of West Virginia," was sentenced to seven years in federal prison for defrauding more than 180 investors out of nearly $400,000. He used social media to promote fake real estate investment opportunities. The investigation involved the FBI, the SEC, and the West Virginia Securities Commission working together.

The case shows a few things. First, even unconventional investment schemes fall under securities law. Second, using social media for client solicitation without proper compliance oversight is risky. Third, state and federal regulators work closely together. And fourth, the consequences for violations are severe, including prison time and full restitution.

Building a Proactive Compliance Culture

Based on everything we've covered, here are some practical strategies for staying compliant:

Use the West Virginia Code as your primary source. When you need to know about fees, registration requirements, or statutory obligations, go directly to the state code. Secondary sources can be outdated or inaccurate.

Start registration early. If you're operating under the de minimis exemption, begin your registration process when you onboard your fifth client, not your sixth. You don't want to be advising clients while technically unregistered.

Integrate compliance into your marketing process. Since West Virginia requires pre-filing of advertising materials, your Chief Compliance Officer needs to review and approve everything before it goes out. For firms managing high volumes of marketing content, compliance technology that automates initial reviews can help ensure nothing slips through before formal submission to the state.

Adopt NASAA standards where state rules are less specific. For areas like cybersecurity and business continuity planning, use the NASAA Model Rules as your internal benchmark. State examiners are likely using those standards to evaluate your program.

Conduct regular internal audits. Use the common deficiencies from NASAA exam reports as a checklist. Review your registration forms for accuracy, check that your books and records are complete, verify your contracts are properly executed, and audit your fee billing against your disclosures.

Keep detailed documentation of your compliance activities. When an examiner shows up, you want to be able to demonstrate that you have an active, functioning compliance program, not just documents sitting in a drawer.

Final Thoughts

West Virginia RIA compliance requires attention to detail and ongoing vigilance. The registration process is thorough, the ongoing requirements are substantial, and the state takes enforcement seriously. But none of it is insurmountable if you approach it systematically.

The Securities Commission's placement within the State Auditor's Office means financial accountability and transparency are priorities. Your best defense is maintaining accurate records, making timely disclosures, and having robust policies that you actually follow.

For advisors managing the administrative burden of compliance, especially around marketing review and documentation, technology solutions can reduce both risk and workload. Luthor is an AI-based platform that helps you review marketing assets for compliance before submission, letting you tackle marketing compliance requirements more efficiently and with greater confidence.

Whether you're just starting out in West Virginia or you've been registered for years, staying current with your obligations protects both your clients and your business. And if you need help streamlining your compliance reviews, especially for the state's advertising pre-clearance requirement, request demo access to see how automated compliance tools can fit into your workflow.