Relying Adviser: Characteristics, Requirements, Examples

Registering an investment advisory firm with the Securities and Exchange Commission (SEC) is a complex process that requires, among other things, the filing of Form ADV. Umbrella registration may be an option for entities that qualify for relying adviser status. A relying adviser is eligible to register with the SEC, but has another adviser handle registration on their behalf. If you qualify, there are some benefits to pursuing an umbrella registration versus an individual registration.

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Relying Adviser Definition and Characteristics

The SEC definition of a relying advisor is as follows: “An investment adviser eligible to register with the SEC that relies on a filing adviser to file (and amend) a single umbrella registration on its behalf.” ¹

Essentially, you have one filing adviser registering multiple entities that operate as a single advisory business together, eliminating the need for individual advisers to register separately. The following characteristics further distinguish umbrella registration:

• All relying advisers under the umbrella are controlled in common by the filing adviser, and are subject to its supervision.
• While individual activities may be different, the filing adviser and the relying adviser(s) engage in the collective operation of a single advisory business.
• All relying advisers must be eligible to register with the SEC individually, though they’re not required to do so.
• Filing and relying advisers are subject to the Advisers Act and examination by the SEC.

Filing and relying advisers must also serve the same type of clientele. Specifically, they can only advise private funds and/or separately managed accounts (SMAs) with investment strategies that mirror those of private funds.

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SEC Registration Requirements for Relying Advisers

In an umbrella registration, the filing adviser is responsible for filing and updating all required paperwork. The steps to register are as follows: ²

1. Create an IARD account: Advisers must create an account with the Investment Adviser Registration Depository to initiate SEC registration.
2. Complete Form ADV: The filing adviser must sign and submit a single Form ADV (Parts 1 and 2) that includes all applicable information about both the filing adviser and each relying adviser. Note that information in Items 1, 2, 3 and 10 should be provided only for the filing adviser.
3. Complete Schedule R: The filing adviser must complete a separate Schedule R for each relying adviser. This form provides basic identifying information about each one, including its form of organization and control persons.
4. Submit documents and pay filing fees: Once all required documents have been completed, the filing adviser will submit them and pay a filing fee. As of 2025, the fee ranges from $40 to $225, depending on the adviser’s assets under management. ³

In addition to the characteristics of relying advisers listed above, two other things must also be true to satisfy umbrella registration requirements:

• The filing adviser’s principal office and place of business must be located in the United States. Relying advisers may be located in other jurisdictions.
• The filing adviser and each relying adviser must operate under a shared code of ethics that is compliant with SEC Rule 204A-1, and a shared set of written policies and procedures that are compliant with SEC Rule 206(4)-(7).

A single chief compliance officer (CCO) is responsible for administering the code of ethics and written policies and procedures for the filing adviser and all relying advisers. One final thing to note about relying advisers is that umbrella registration is not available to exempt reporting advisers.

Relying Adviser Example

Here’s an example of how registration as a relying adviser might work.

Let’s say that a large registered investment advisor (RIA) has three investment advisory affiliates that operate as part of the same business. Each one is slightly different:

• Affiliate A manages a specific type of private fund that the other two do not.
• Affiliate B has a different compensation structure from its sibling affiliates.
• Affiliate C focuses exclusively on SMAs that follow the investment strategy of private funds.

Since the same filing adviser controls each affiliate, an umbrella registration is permitted. Should it make sense to do so, or become necessary for any reason, any of the affiliates could pursue an individual registration. For example, if one affiliate decides to move away from private funds to serve a different type of client, an individual registration for that entity would be required.

Benefits of Relying Adviser Status

Umbrella registration can offer some advantages for both filing and relying advisers alike. The main benefits include flexibility, simplicity and cost savings. Other benefits include:

• Streamlined registration: An umbrella filing eliminates the need for each relying adviser to navigate the registration process. That can save both time and money since a relying adviser is not required to pay individual filing fees.
• Compliance: Compliance management may also be simplified, since both filing and relying advisers are subject to the same code of ethics and written compliance policies. Whether you hire an in-house CCO or outsource CCO duties, an umbrella registration could make their job easier to manage.
• Flexibility: Relying advisers under the same umbrella don’t need to have the same purpose or business structure; they simply need to be eligible for SEC registration and serve the same types of clients (i.e., private funds).
• Efficient reporting: Filing Form ADV updates is a necessary, but sometimes time-consuming, task that RIAs must complete at least annually. With an umbrella registration, the filing adviser can submit a single updated Form ADV that covers all relying advisers.

If you’re not eligible to register as a relying adviser, you’ll have to complete the registration process yourself. The steps are the same: Create your IARD account, submit Form ADV and pay the filing fees. You may consider working with a registration consultant if you need help navigating each step.

Bottom Line

Relying adviser status can offer a smoother path to registration, but its limited eligibility scope means it’s not right for every situation. Advisers offering services that go beyond managing private funds must pursue individual registration instead. Reviewing SEC registration requirements can help you decide which option is right for you.

Tips for Growing Your Advisory Business

• Digital marketing is only one way to bring in new potential clients. SmartAsset AMP (Advisor Marketing Platform) is a holistic marketing service financial advisors can use for client lead generation and automated marketing. Sign up for a free demo to explore how SmartAsset AMP can help you expand your practice’s marketing operation. Get started today.
• Going independent has its advantages, including greater freedom and flexibility when it comes to the clients you serve, how your create your daily schedule and the fees you charge. Before you launch an RIA, it’s important to research the steps required to register and the estimated costs to start an investment advisory firm. Talking to a senior advisor or recruiting a mentor can offer insight on what to expect and how to create a plan for success.

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