Validating an RIA Launch: The Public Record, Your Book, and the Custodian Myth

Read the Public Record Before You Write a Business Plan

Every SEC- and state-registered investment adviser files a Form ADV, and the SEC's Investment Adviser Public Disclosure (IAPD) site makes every one of those filings searchable for free. Before you assume you know your competitive landscape, pull the Part 2A brochures of a dozen advisers who already serve your intended niche and geography: their disclosed AUM, their fee schedule, the services they actually list, and any disciplinary disclosures. This tells you, from primary sources, whether a niche is served well or poorly, what fee levels the market already accepts, and whether the firms you'd compete with are thin on service or genuinely strong. Cross-reference the same firms and their advisors on FINRA BrokerCheck, which additionally surfaces broker-dealer registration history and customer complaints that don't always appear on IAPD. Twenty minutes with both sites replaces a lot of guessing.

Test Whether Your Book Is Actually Portable

Before any other validation question matters, find out what your current employment agreement actually says about client contact after you leave. Non-solicitation clauses, non-compete clauses, and confidentiality provisions governing client lists are standard at wirehouses and many independent broker-dealers, and they are enforceable to different degrees in different states. Get your actual agreement in front of an employment attorney who handles advisor transitions before you validate anything else — a niche with strong demand is irrelevant if you can't legally reach the clients who'd fill it. This is a one-time cost worth incurring early, not something to defer until you've already built momentum around a launch you may not be able to execute the way you're picturing.

Talk to the People Who Send Referrals, Not Just Prospective Clients

CPAs, estate attorneys, divorce attorneys, and other centers of influence who already sit next to advisory transactions have a current advisor they refer to and specific reasons they would or wouldn't switch. A handful of honest conversations with these referral sources — asking who they send business to now, what that advisor does that disappoints them, and what would make them consider a new relationship — tells you more about real demand than any amount of desk research. These conversations are not solicitation and don't require you to be registered; you're gathering information, not offering advisory services. Treat the answers as data: if nobody can name a specific gap, that's a real signal, not a conversation to write off.

The Custodian-Minimum Myth That Talks People Out of Launching

A specific piece of misinformation stops otherwise-ready advisors before they start: the belief that you need a large book or a large personal net worth before a custodian will work with you. It isn't true of the major platforms. Altruist states on its own site that there are no AUM minimums; Betterment Advisor Solutions states the same — no minimum AUM requirement; Axos describes itself as welcoming RIA firms of all sizes. Schwab, Fidelity, Pershing, Raymond James, Interactive Brokers, Apex, RBC, and Goldman all publish no firm minimum either. The $2 million (rising to $5 million) figures sometimes cited as a Schwab requirement are actually per-client floors for the separate Schwab Advisor Network referral program — not a custody minimum — and confusing the two is the single most common error people make when they research this question.

Decide Your Registration Path Early — It Gates Your Timeline

Whether you'll register with the SEC or with your state depends on an AUM threshold that is set by rule and does change, so don't build your validation timeline around a number you remember from an old article. Check the current threshold directly against NASAA and SEC guidance before you assume you know which path applies to you, because it determines which regulator you'll deal with, which exam or notice-filing obligations follow, and how long the registration process is likely to take. This is a validation-stage decision, not a form-filling detail you can leave for later — it shapes how much runway you need to budget before you can legally open your doors.

A Pre-Launch Validation Sequence

Week one: pull your employment agreement and get it in front of an advisor-transitions attorney; separately, request your current Form U-4/U-5 history so you know what will be disclosed publicly when you move. Week two: search IAPD and BrokerCheck for ten to fifteen firms serving your intended niche and geography, and log their disclosed fees, AUM, and services. Week three: have five conversations with referral sources in your target niche and write down what each one actually said, not what you hoped they'd say. Week four: confirm your SEC-vs-state registration path against current NASAA guidance and write a one-page memo naming your niche, your portability constraints, and your realistic registration timeline. If any line of that memo is a guess rather than something a document or a named person told you, that's the next thing to close.

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