The central question heading into 2026 is twofold: does your firm have a New York place of business, and have you crossed the applicable client threshold during the relevant 12-month lookback period? Get either answer wrong, and you could be operating without required registration.
This article breaks down the fewer-than-six-client standard, how New York counts clients, state-specific exceptions, investment adviser representative (IAR) implications, and the steps to take before you accept your next New York client.
Key Takeaways
- De minimis relief requires no New York place of business and fewer than six New York clients in the trailing 12 months.
- Eligibility turns on client presence and business location, not assets under management.
- Financial-planning, hourly, and project-based clients can still count toward the six-client limit.
- Near the threshold, start Form ADV, IAR registration, and exam-waiver prep early.
What Is New York's Investment Adviser De Minimis Exemption in 2026?
Two separate rules govern this exemption, and conflating them is where most advisers get tripped up.
The Federal Baseline: Section 222(d)
Section 222(d) of the Investment Advisers Act of 1940 blocks a state from forcing registration on an adviser that meets both conditions:
- No place of business in that state
- Fewer than six clients who are residents of the state during the preceding 12 months
The SEC reaffirmed these two conditions in its 2020 rulemaking release. Miss either condition, and the federal safe harbor disappears.
New York's Own Client-Count Rule
New York General Business Law section 359-eee(1)(a)(5) runs a parallel but distinct test. It excludes advisers who sold services to fewer than six New York residents in the preceding 12 months, excluding financial institutions and qualifying institutional buyers.
This state-level exclusion does not write in a no-office condition the way the federal rule does.
Why "Place of Business" Still Matters
Under SEC Rule 222-1, a "place of business" includes any office where the adviser regularly provides advice, solicits clients, meets with clients, or any location held out to the public for those purposes. A qualifying New York office defeats the federal safe harbor even if you serve only two or three New York residents.
Here's where it gets practical. Consider two firms:
- Firm A: Based in New Jersey, no New York office, four New York clients. Likely protected under both the federal and state tests.
- Firm B: Same four New York clients, but maintains a satellite office in Manhattan. The federal protection is off the table, and the New York exclusion needs separate confirmation.
A few things the de minimis exemption leaves untouched:
- Anti-fraud obligations under federal or New York law
- SEC notice-filing requirements for federally registered firms
- The separate $100 million to $110 million regulatory assets under management (RAUM) threshold that allocates SEC versus state registration, per SEC Form ADV instructions
2026 verification note: New York's Attorney General periodically updates FAQs and Part 11 regulations. Confirm the current wording before relying on any client count, since dated guidance can lag behind actual enforcement positions.
How New York Counts Clients for the De Minimis Test
The test asks how many New York clients you served during the preceding 12 months, not how many accounts you currently manage. That distinction trips up a lot of firms that quietly assume dormant or terminated relationships don't count.
Households, Relatives, and Trusts
A single client can include more than one person. Under New York's Part 11 regulations and the federal successor to Rule 203(b)(3)-1, one client may encompass:
- A natural person and their minor children
- A spouse or qualifying relative sharing the same principal residence
- Accounts or trusts where those same people are the only primary beneficiaries
This is a defined grouping, not a license to lump together an entire extended family.
Entities and Organizations
A corporation, partnership, LLC, or trust advised according to its own investment objectives generally counts as one client. Entities with identical owners or beneficiaries may sometimes be grouped, but separately owned entities typically count separately. Don't assume shared ownership automatically combines two businesses into one client.
Clients That May Still Count
Several categories often get miscounted or ignored entirely:
- Former clients — the lookback period asks who you served in the preceding 12 months, so a relationship that ended mid-year may still be inside the window.
- Financial-planning and project-based clients — a compensated engagement involving securities advice can count even without an AUM fee.
- Subscription or hourly clients — service structure doesn't automatically exclude someone from the count.
- Qualifying financial institutions and institutional buyers — these are generally excluded under New York's statutory definition, but confirm the client actually meets the institutional definition before excluding them.
Build a Client-Counting Worksheet
A simple internal tracker helps avoid surprises. Capture:
- Client name and residence state
- Entity type (individual, trust, LLC, household)
- Engagement start and termination dates
- Service type (AUM, hourly, project-based)
- Household or entity relationships
- Supporting documentation (engagement letter, address confirmation)
When Must an Adviser Register in New York?
Registration obligations depend on whether you're state-registered or SEC-registered, and whether you have a New York office at all.
Firm-Level Registration Triggers
Two primary triggers drive New York registration:
- Client-count trigger — an out-of-state, state-registered adviser that reaches six or more countable New York clients generally must register, absent another exclusion.
- Place-of-business trigger — a firm with a qualifying New York office may need to register regardless of how few New York clients it has.
The path then differs by registration type:
| Firm Type | New York Obligation at 6+ Clients |
|---|---|
| State-registered adviser | Full New York state registration |
| SEC-registered adviser | Notice filing via IARD (not full registration) |
New York's $100 million-plus RAUM threshold determines whether you register with the SEC or a state at all. That allocation rule is separate from the state's six-client test, not a substitute for it.
IAR and Solicitor Requirements
Whether an individual needs New York IAR registration depends on:
- The firm's SEC or state registration status
- The individual's advisory or supervisory activities
- Whether they work from a New York place of business
- Whether they meet the federal or New York IAR definition
For representatives of federally covered advisers, New York looks at a New York place of business plus Rule 203A-3's IAR criteria.
New York's Part 11 regulations define a solicitor as someone compensated for introducing prospective clients to an adviser as part of a regular business. Solicitor firms are generally subject to the same more-than-five-client registration trigger, and their representatives face their own exam and registration rules, per New York's Part 11 regulations.
An ordinary marketing referral without compensation tied to introductions is treated differently. Confirm the distinction before assuming either status applies.
What Registration Actually Requires
Once you confirm registration is required, expect to assemble:
- Form ADV Parts 1A, 1B, 2A, and 2B through IARD
- Form U4 for applicable principals, supervisors, and IARs through CRD
- Year-end balance sheet and income statement (with interim statements if needed)
- Applicable state registration and notice-filing fees
- Examination evidence (Series 65, or Series 7 plus Series 66) or a qualifying waiver
What to Do When You Approach or Exceed the Threshold
Don't wait until you've signed your sixth New York client to think about registration. By then, you're already exposed.
Build a Recurring Review Process
Run your New York client count against a documented schedule, not just when something feels off:
- Pull a CRM report before onboarding any new New York resident
- Reconcile that report manually at least quarterly
- Flag any client whose residence or engagement type is ambiguous
Start Registration Prep Early
Registration isn't instant. Form ADV disclosures, IAR registrations, exam scheduling, and fee payments all take time. Firms that start planning only after crossing the threshold often end up operating in a gap period they didn't anticipate.
A practical escalation checklist:
- Pause or condition new New York engagements if you're near the limit
- Confirm actual client residence, not just a mailing address on file
- Determine your current registration status (state, SEC, or unregistered)
- Consult qualified New York securities counsel before making a final call
- Document the determination, including the reasoning and sources relied on
Keep the Paper Trail
Maintain written records of your exemption analysis: client addresses, engagement and termination dates, entity relationships, and your place-of-business determination. If a regulator ever asks why you believed you qualified, you'll want more than a verbal explanation.
Clean financial records strengthen that file. VJM Global supports accounting and record-keeping for internationally active businesses, helping firms maintain documentation that supports a registration or exemption position.
Securities-registration determinations and legal interpretation still require qualified New York regulatory counsel. Accounting support does not substitute for legal advice.
Reassess your status whenever something changes: a new office location, a shift in client mix, new service offerings, a change in adviser status, ownership changes, or new representative responsibilities. Treat the de minimis analysis as a living determination, not a one-time checkbox.
Frequently Asked Questions
Who must register as an investment adviser with assets under management of $105 million?
Advisers with roughly $100 million to $110 million in federal RAUM may be permitted or required to register with the SEC. That federal range is separate from New York's client-count test—verify current SEC thresholds before you decide.
Who needs to register as an investment adviser representative?
It depends on the firm's SEC or state registration status, the individual's advisory or supervisory role, and where they have a place of business. Apply the New York or federal IAR definition that matches the firm's registration path.
Does New York have a de minimis exemption for investment advisers?
Yes. New York generally excludes advisers with no qualifying New York place of business and fewer than six New York clients in the preceding 12 months. Exceptions exist, so check current Attorney General guidance before relying on it.
Does an investment adviser with five New York clients need to register?
Five or fewer clients may fall within the exemption only if every other condition is also met, including no qualifying New York place of business and proper application of the 12-month counting rules.
Does a New York office eliminate the de minimis exemption?
A qualifying New York place of business generally defeats the federal safe harbor and can trigger registration even with very few clients. Confirm whether your location meets the place-of-business definition.
Do financial-planning clients count toward New York's de minimis threshold?
Potentially, yes. Compensated financial-planning and project-based advisory engagements can count even without an AUM component, since the test focuses on compensated securities advice, not fee structure.
