REGISTER FIRST – WITHDRAW SECOND
The most important thing to remember about transitioning from SEC to state registration (other than to actually do it if you have less than $90 million in AUM) is do not – repeat, do not – withdraw from your SEC registration until you have an effective registration with at least one state. If you withdraw prior to that, your advisory firm will not be registered in any jurisdiction and you will be in violation of numerous state and federal regulations (e.g., providing investment advisory services while not registered).
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