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Starting a Registered Investment Advisor firm in Wisconsin comes with its fair share of paperwork and regulations, but understanding the compliance requirements from day one can save you a lot of headaches down the road. If you're a financial advisor thinking about going independent or an existing firm expanding into Wisconsin, this guide is for you.
We'll walk through everything from registration thresholds and filing fees to ongoing compliance obligations and cybersecurity requirements. In Wisconsin, RIAs are regulated by the Department of Financial Institutions (DFI), Division of Securities. Getting familiar with their rules is the first step toward building a compliant and successful advisory practice.
The truth is, Wisconsin's regulatory framework aligns pretty closely with federal standards set by the SEC and NASAA, so if you're already familiar with investment adviser regulations in other states, you'll notice some similarities. But there are state-specific nuances worth knowing about.
Not every financial professional needs to register as an RIA in Wisconsin. The requirement depends on a few factors, mainly your assets under management and where you do business.
The dividing line between state and federal registration is under $100 million in regulatory assets under management. If your firm manages less than that amount, you'll generally register with the Wisconsin DFI. Once you hit $100 million or more, you move to SEC registration and become what's called a federal covered adviser.
There's a buffer built in to prevent firms from bouncing back and forth between jurisdictions because of market fluctuations. A state-registered adviser doesn't have to switch to SEC registration until AUM surpasses $110 million. So you've got a bit of breathing room there.
Wisconsin follows the standard de minimis exemption for out-of-state advisers. If you don't have a physical office in Wisconsin and you're working with five or fewer clients in the state during a 12-month period, you don't need to register. Once you hit that sixth client, registration becomes mandatory.
Having a physical office in Wisconsin automatically triggers the registration requirement, regardless of how many clients you have in the state. Even if you're primarily working with out-of-state clients, that Wisconsin address means you need to be registered with the DFI.
Getting registered as an RIA in Wisconsin involves several steps, all completed through electronic systems. The process is pretty standardized, but attention to detail matters.
Before you can register, you need a formal business structure. Most advisers set up as an LLC or S-Corp, though sole proprietorships are also an option. You'll need your federal tax ID number (or Social Security number for sole proprietors) ready for the registration paperwork.
The heart of your registration is Form ADV, which gets filed through the Investment Adviser Registration Depository, or IARD. This online system is run by FINRA and serves as the central hub for all adviser filings.
Form ADV has two main parts. Part 1 is the check-the-box section that covers your business structure, ownership, client types, and AUM. It also asks about any disciplinary history. Part 2A is your client-facing brochure written in plain English. This is where you describe your services, fees, investment strategies, and potential conflicts of interest. You'll also need Part 2B, which provides biographical information about each individual adviser at your firm who works directly with clients.
Wisconsin requires a few additional documents beyond the Form ADV. You'll need to upload samples of your client advisory contracts, a signed Designation of Supervisor form, and a Financial Certification form. The Financial Certification basically confirms you meet the state's net worth requirements, which we'll get into shortly.
Every individual who provides investment advice on behalf of your firm needs to be registered as an Investment Adviser Representative, or IAR. This is done through Form U4, filed electronically through the Central Registration Depository.
IARs need to pass certain exams to qualify for registration. You can either take the Series 65 exam, or if you're already registered with a broker-dealer, you can take the combination of the Series 7 and Series 66. The exam requirement is waived if you hold certain professional designations like CFP, ChFC, PFS, CFA, or CIC.
All fees are processed through the IARD system. We'll break down the specific dollar amounts in the next section.
Once you submit a complete application, the DFI has up to 45 days to review it and either approve your registration or request additional information. In practice, applications without any red flags often get approved faster than that.
Let's talk about what it actually costs to register and maintain your RIA license in Wisconsin.
For the initial firm registration, you'll pay $400. That breaks down to $200 for the application and $200 for the review. The annual renewal fee for the firm is $200.
Each Investment Adviser Representative pays $80 for initial registration and $80 for annual renewal.
If you're a federal covered adviser filing a notice in Wisconsin, the initial notice filing fee is $200, with a $200 annual renewal.
Branch offices, whether for state-registered or federal covered advisers, cost $80 for initial registration and $80 for annual renewal.
These fees aren't huge compared to some states, but they add up if you have multiple IARs or branch locations. Make sure to budget for them as part of your ongoing compliance costs.
Registration is just the beginning. Staying compliant means meeting a number of ongoing obligations throughout the year.
Every year, you need to file an updated Form ADV within 90 days of your fiscal year-end. This is your chance to update information about your business, any changes in ownership or services, and your current AUM. If anything material changes during the year, like a shift in your fee structure or a new disciplinary event, you need to file an amendment within 30 days. These ongoing updates are part of the broader RIA compliance requirements that all investment advisers need to follow.
All Wisconsin RIAs and IARs must renew their registrations annually by the end of the calendar year. This is separate from the Form ADV update and involves paying the renewal fees we mentioned earlier.
Wisconsin law explicitly requires every investment adviser to establish written supervisory procedures that can reasonably prevent and detect violations of securities laws. This isn't just a suggestion. Your compliance manual needs to be a living document that reflects how your firm actually operates.
At a minimum, your compliance manual should cover a Code of Ethics, client suitability procedures, custody protocols if applicable, advertising and marketing review processes, privacy and cybersecurity policies, and a business continuity plan. The DFI recommends conducting an annual review of these procedures to make sure they're still current and effective.
Wisconsin has detailed rules about what records you need to keep and for how long. Required records include corporate documents like partnership agreements and minute books, all client contracts and communications, copies of all advertisements and marketing materials, financial records showing cash receipts and disbursements, and documentation of client suitability information like net worth, income, and investment objectives.
All of these records must be preserved for at least five years, with the first two years in an easily accessible location, usually your principal office.
Wisconsin imposes minimum net worth requirements on RIAs depending on their business practices. If you have custody of client funds or securities, you need to maintain a minimum net worth of $35,000 at all times. Custody can be triggered by things like holding client stock certificates or having full signatory authority over client accounts.
If you accept prepayment of advisory fees of $1,200 or more per client, six or more months in advance, you need to maintain a positive net worth at all times. You'll need to provide a balance sheet prepared according to GAAP to demonstrate compliance.
Wisconsin implemented a mandatory continuing education requirement for IARs a few years ago, and it's something every firm needs to stay on top of. Each IAR must complete 12 credit hours of approved CE annually. The 12 credits are split evenly between Products and Practices (6 credits) and Ethics and Professional Responsibility (6 credits).
If your IARs are also registered with a broker-dealer, they can apply their FINRA Regulatory Element training to satisfy the 6-credit Products and Practices requirement.
Compliance is tracked through FINRA's FinPro system. IARs who don't complete their required credits by December 31 will have their status changed to "IAR CE Inactive." They can still work, but they need to make up the deficiency along with completing the current year's requirement. If they don't catch up by the end of the following year, they won't be able to renew their IAR registration.
As a compliance officer or supervisor, tracking CE completion for your team is now part of your job. It's one more thing to add to your annual compliance calendar.
The advisory contract you use with clients needs to include certain provisions required by Wisconsin law. There must be a clause prohibiting the assignment of the contract to another adviser without the client's explicit consent. The contract should also provide clients with a five-business-day withdrawal privilege if they didn't receive your Form ADV Part 2A brochure at least 48 hours before signing.
At least once per year, you need to deliver or offer in writing to deliver your current Form ADV Part 2A brochure and Privacy Policy to every client. This annual delivery requirement ensures clients stay informed about any changes to your business practices.
If you open a new branch office, you need to report it to regulators via Form BR within 14 days.
Protecting client data isn't just good business. It's a core part of your fiduciary duty as an investment adviser. Both the Wisconsin DFI and NASAA have identified cybersecurity as a top examination priority, so you need to take it seriously.
Wisconsin hasn't adopted a specific standalone cybersecurity rule yet, but the DFI's consistent guidance through newsletters creates a clear expectation that firms will implement reasonable safeguards. If you suffer a data breach and can't show you followed industry best practices, you could be found in violation of your general supervisory obligations.
A solid cybersecurity program starts with a written incident response plan. This plan should outline the steps you'll take to assess, contain, and control a breach, as well as how and when you'll notify affected clients.
Regulators expect to see several key protective measures in place. Use reputable antivirus software and keep it updated. Enable multi-factor authentication on all accounts that support it. Encrypt all portable devices like laptops and smartphones that contain client information. Train your employees regularly on how to recognize phishing scams and social engineering attempts. Enforce a strong password policy requiring complex, unique passwords that get changed regularly. And back up your critical data routinely, then test those backups to make sure they actually work.
For firms thinking about streamlining their compliance processes, including the review of marketing materials for potential cybersecurity and regulatory risks, tools like Luthor can help reduce the manual effort involved in compliance oversight. Luthor uses AI to automatically review marketing assets for compliance issues, which can be particularly useful as your firm scales and produces more client-facing content. RIA compliance software like this can help you stay on top of multiple requirements without adding significant overhead.
The DFI has up to 45 days to review your application once it's complete. In practice, applications that don't raise any red flags often get approved faster. The key is submitting a complete application with all required documents the first time. Incomplete applications will just slow things down.
Yes. Out-of-state advisers who don't have a physical office in Wisconsin and work with five or fewer clients in the state during a 12-month period are exempt from registration. Once you hit that sixth Wisconsin client, you need to register.
IARs in Wisconsin can satisfy the exam requirement in two ways. You can either pass the Series 65 exam, or if you're already registered with a broker-dealer, you can pass the combination of the Series 7 and Series 66. The exam requirement is waived for individuals who hold certain professional designations including CFP, ChFC, PFS, CFA, or CIC.
Having a physical office in Wisconsin automatically triggers the registration requirement, regardless of your client count. But you don't necessarily need a Wisconsin office to be required to register. If you're an out-of-state adviser working with more than five Wisconsin clients, you'll need to register even without a physical presence in the state.
Once your regulatory assets under management exceed $110 million, you'll need to transition from state registration to SEC registration. This is a significant compliance milestone that brings a different level of regulatory scrutiny and more complex filing requirements. Understanding SEC RIA compliance becomes important at this stage. It's worth planning ahead for this transition, including budgeting for additional compliance resources.
According to the 2025 NASAA Annual Report, the most common causes of state-level enforcement actions nationally are failure to register as an investment adviser or IAR, improper fee practices, violations of fiduciary duty, inadequate or non-existent compliance policies and procedures, failure to disclose material conflicts of interest, and fraud. These issues represent where regulators focus their attention during examinations.
Understanding where your firm fits in the broader industry picture can help with strategic planning and competitive positioning. The investment adviser industry has been experiencing steady growth. According to 2024 data, there are approximately 15,870 SEC-registered advisers nationally managing around $145 to $146 trillion in regulatory assets, serving about 68.4 million clients.
The state-registered adviser landscape is quite different from the SEC-registered world. At the end of 2024, there were 16,575 state-registered RIAs across the country. A remarkable 76.4% of these firms have two or fewer employees. So if you're starting small, you're in good company.
One demographic trend worth noting is that over the next decade, 105,887 advisors representing 37.4% of the industry's headcount are planning to retire. This wave of retirements, combined with the fact that many smaller firms lack formal succession plans, creates both challenges and opportunities for newer firms entering the market.
Building a compliant RIA practice in Wisconsin requires attention to detail and a commitment to ongoing education. The regulatory requirements might seem overwhelming at first, but they're designed to protect clients and create a level playing field for advisers.
The key is to build compliance into your business from day one rather than treating it as an afterthought. That means creating a comprehensive compliance manual that actually reflects your business practices, staying current with your annual filings and renewals, keeping detailed records, protecting client data through strong cybersecurity measures, and making sure all your IARs complete their continuing education requirements.
The good news is you don't have to do it all manually. As compliance requirements have grown more complex, especially around marketing review and advertising compliance, many firms are looking for ways to work more efficiently. Luthor is an AI-based compliance tool that automatically reviews marketing assets for potential compliance issues, helping you reduce risk and save time on compliance oversight as your firm grows. Many firms also work with RIA custodians who provide integrated compliance support as part of their custody services.
If you're interested in seeing how Luthor can help streamline your Wisconsin RIA compliance, particularly around marketing materials review, you can request demo access to see the platform in action. Managing compliance at scale doesn't have to mean hiring a full-time team. With the right tools and processes, you can stay compliant while focusing on what you do best: serving your clients.