Don't forget about your annual renewal fees!

We have officially entered the annual renewal season for 2016! As we prepare for the holidays, don't forget that you must submit payment for your firm's annual renewal fees. Failure to do so by the stated deadline will result in the termination of your RIA's registration.  You should have already received an email from FINRA in regards to your Preliminary Statement.  Your preparations should be underway now as the deadline for payments is December 18, 2015.  What do you need to do?  


Complete a thorough review of your current registration status.  Here are a few questions to ask yourself:

• Based on your client growth, have you exceeded the de minimus threshold in additional state(s)?  
• Are you currently registered in any states where you are now under the de minimus threshold?
• Are your IARs properly registered?  Key Reminder: For SEC firms, some states do not require IAR registration if there is no place of business or under the de minimus threshold. 
• Once you have confirmed your applicable registrations, make sure to validate the fees calculated by FINRA and transfer funds into your Renewal Account (IARD system). 

If you are not an AdvisorAssist Compliance Client and are seeking assistance with the Annual Renewal process, please contact us at:  sales@advisorassist.com.

For more information, please see the IARD Renewal Program page:  http://www.iard.com/renewals.asp

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RIA Renewal Fees - It is that time again!

As Benjamin Franklin so eloquently stated in 1789, "... in this world nothing can be said to be certain, except death and taxes."
As we roll into the holiday season and prepare for year end, there is yet another certainty. If your fees are not paid in December, you won't be a Registered Investment Advisor in 2015!

FINRA Preliminary Renewal Statements

While FINRA is not your RIA's regulator, they do own the systems that the SEC and the States use to register your firm and its advisory persons. They are also paid to administer the task of collecting your money for the regulators. Starting on November 10, 2014, FINRA will begin emailing designated contacts in your firm with your Preliminary Renewal Statement. This statement identifies what you owe based on where you are registered at the firm and individual levels. All payments must then be made prior to December 12, 2014.

What other steps should my firm take?

1. Review client geography and registration requirements. Are both your RIA firm and your investment advisor representatives properly notice filed and/or registered with each state in which you conduct business (or exempt)? If you exceed the de minimis threshold, you may be required to notice file or register.
2. Review existing registrations. Are you registered in any states where you are under de minimis standards?
3. Review IAR Registrations. Are your IARs properly registered? For SEC firms, some states do not require IAR registration if there is no place of business or under the de minimis threshold.

What happens if I don't pay my fees?

On December 31, 2014, all RIA and IAR registrations expire. If you have not paid and renewed those registrations for 2015, you may be terminated and your right to do business may be revoked. Several states automatically terminate your registration through their participation in the Automatic Fail To Renew Program for 2015. If your RIA firm or its representatives are registered or notice filed in a jurisdiction that participates in the program, your jurisdiction has authorized FINRA to automatically terminate your registrations on December 31, 2014 if all fees are not correct funded in the IARD Renewal Account by the deadline (December 12, 2014).

Next Steps

If you are an AdvisorAssist Compliance Client, we will analyze your account and your Preliminary Renewal Statement to provide guidance on requirements and fees. You may also receive notices from the state(s) and/or FINRA. You may forward those to our attention.

If you are not an AdvisorAssist Compliance Client, we welcome the opportunity to discuss our services. Please contact us at info@advisorassist.com.

Additional information can be found on the FINRA website.

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FINRA Refunds

Hopefully you made it safely through the FINRA renewal process this year.

With new, but still outdated FINRA systems and states in need of funds, we find ourselves at the edge of our seats through the renewal payment season.

Based on the limitations of the FINRA systems, some firms were forced to overpay in November and December. Now it is time to get a refund. FINRA will not automatically refund any overpayments. A formal request to FINRA is required.

Here's how you do this...

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How to Request a Refund from Your Account

Firms may choose to withdraw funds from their Flex-Funding Account due to various circumstances (e.g., renewal refund, or account overfunding). To request a refund from your firm's account, send an email to FINRA Refunds.

Email must be sent from an appropriate firm signatory
Reference the Firm CRD number
Include requested refund amount
Please include the total balance of your firm’s Flex-Funding Account for verification purposes in the email.

Note: The refund check will be made payable to the firm and mailed to the address of record. Most refund requests should be processed within 10 business days of receipt except during the annual renewal season.

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For AdvisorAssist Compliance Clients, we will be contacting you to determine any refunds you would like processed.

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California ratchets up IAR fees

California increases IAR fees

California previously had one of the lowest fees for investment advisor representatives ("IARs") in the U.S. for years. With the financial condition of the state and the number of advisory persons conducting business there, it was always surprising that they did not seek to increase this fee earlier.

So the bad news is that fees are increasing for 2014. The silver lining is that they did not go the route of Texas soak IARs for nearly $300 per year!

California has increased its IAR fees from a one-time fee of $25 per IAR to an annual fee of $35.

Due to the timing of the implementation of this law, the California fee will be paid in January 2014. The full text of the notice is below:

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IMPORTANT NOTICE REGARDING RENEWAL FEES

November 22, 2013

Dear licensee,

This letter is to inform you that the California Legislature recently passed Senate Bill (“SB”) 538, authorizing the Department of Business Oversight (“Department”) to charge up to $35 in renewal fees annually for each registered Broker-Dealer Agent (“Agent”) and each registered Investment Adviser Representative (“IAR”). California is the second-to-last state to adopt a renewal fee and the proposed fee will be one of the lowest in the nation. Individuals who are dually registered will be assessed separately for each registration.

Because SB 538 becomes effective on January 1, 2014, the 2014 Agent and IAR renewal fee cannot be assessed through the CRD/IARD Renewal Program. Therefore, for the first renewal fee only, a supplementary assessment will occur in January 2014. The Department will send an invoice to each firm stating the number of Agents and/or IARs and the total amount to be remitted to the Department. The Department will use the December 31, 2013, Regulator Renewal Report generated by CRD/IARD to determine the number of Agents and/or IARs registered with your firm. The payments may be remitted via your CRD/IARD account or sent directly to the Department via check. Additional information regarding your payment will be provided with your invoice.

If your firm intends to reduce the number of individuals registered to conduct business in California as a way to reduce your renewal fee obligation, you will need to file a Form U5. The U5 can be dated on or prior to the date of filing or postdated to December 31, 2013 to permit registered activity to continue through the end of the year. Please note that web CRD will not be available on December 25, 2013, and from December 27, 2013 through January 1, 2014. The last day to file a Form U5 will be December 26, 2013.

Future annual renewals will be made through the annual renewal process handled in December by CRD/IARD.

Should you have any questions please contact the Department at (866) 275-2677.

Jan Lynn Owen
Commissioner
Department of Business Oversight

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