What Is a Mid-Sized Adviser?

By: Daniel A. Perry

Generally, a mid-sized adviser is defined as an investment adviser that has between $25 million and $100 million in assets under management. In addition, mid-sized advisers, like investment advisers and investment adviser representatives, must register with their state securities division in which they conduct business. However, there are circumstances in which a mid-sized adviser may have to register with the Securities and Exchange Commission.

Under the SEC regulations, a mid-sized adviser must register with the SEC if (1) it is not required to be registered as an adviser with the state securities authority only in the state where it maintains its principal office, or (2) is not subject to examinations by the state where it maintains its principal office.

Example:

For example, John is an investment adviser that manages $50 million in assets for his clients. In addition, John is in a state where he is not required to register as an investment adviser. In this case, John would be required to register with the SEC.

The number of states that this exception applies to is quite small. In fact, the only state that currently permits mid-sized advisers not to be subject to examination by the state securities division is the State of New York.

As you can see, the rules and compliance requirements are complex, sometimes confusing, and can overlap. Therefore, many of our clients find it beneficial to hire our office as their General Compliance Counsel.

For more information:

If you have a compliance question regarding your business as an investment adviser or you are interested in retaining our office as your General Compliance Counsel, please contact our office at (513) 241-0400 or visit our website to schedule an initial consultation. We look forward to hearing from you!