Expert Advice: How to Set Up Your Financial Advisory Firm

Expert Advice: How to Set Up Your Financial Advisory Firm - Elevate CPA Group

If you’re looking to break away and set up your financial advisory firm, aligning yourself with an outsourced CFO can help you get off to a solid start. The right outsourced CFO will not only facilitate the entire process but also will serve as your trusted advisor for years to come.

Here are six key steps to setting up your RIA firm and how working with an outsourced CFO can make a difference.

Register your RIA firm with the proper regulatory bodies

Whether you’re registering your firm with the Securities Exchange Commission (SEC) or a state regulatory body, the process is likely to be arduous and costly. For this reason, consider hiring a regulatory compliance consultant. This individual can assist with your firm’s regulatory registrations and monitor the process along the way. An outsourced CFO can vet and approve a regulatory compliance consultant for you, so you know you’re working with the right one.

Choose an entity structure

The entity structure (e.g., partnership, S corporation, etc.) you choose is critical to positioning your firm for growth, as are the agreements between you and your partners. Your outsourced CFO works closely with attorneys who can assist in drafting shareholder, operating, and noncompete agreements.

Develop your IT infrastructure

Given our current regulatory landscape and the risk of cybersecurity issues, having a robust IT infrastructure is more critical than ever. That said, avoid rushing into any IT solution. The solutions you choose should fully meet the unique needs of your RIA firm, including those related to email correspondence and archiving.

An outsourced CFO can point you to a preferred IT provider who can offer the services you need. Equally important, your outsourced CFO can ensure this aspect of your business is at a proper monthly cost.

Set up your books

Per the SEC’s “Books and Records Rule,” your RIA firm is required to make and keep true, accurate, and current books and records. As you might imagine, this is only the tip of the iceberg of this rule. An outsourced CFO can make sure your firm stays in compliance. In addition to providing updated financial statements each month, an outsourced CFO can provide tax planning and preparation services—for your RIA firm as well as your clients.

Build your client base

Marketing your RIA firm is essential to meeting your goals for growth. Not only must your marketing be effective; it must also comply with applicable regulations. This is why it’s essential to work with a marketing firm that specializes in the financial services industry. An outsourced CFO can connect you with an appropriate marketing firm for you.

Work with an experienced outsourced CFO

It can be both thrilling and overwhelming to set up your financial advisory firm. As a CPA firm focused solely on investment advisory firms, Elevate offers outsourced CFO services to support you through the process. We leverage our tax and accounting background as well as our relationships with attorneys, regulatory compliance consultants, and marketing firms to help you find success.

If you’re ready to explore how Elevate can help you set up your RIA firm and maximize its value, schedule your complimentary consultation today.