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A prolonged government shutdown could derail a potentially record year for new RIA registrations, according to data from the RIA intelligence platform AdvizorPro.
An AdvizorPro analysis of RIA registration data for WealthManagement.com found that, before the shutdown began in October, new RIA approvals with the Securities and Exchange Commission totaled 1,267 year-to-date, representing a 15.5% increase over the same period in 2024.
AdvizorPro projected approximately 1,689 approvals in 2025 if the SEC had continued at its pre-shutdown pace projection. The projected total would exceed the SEC’s previous one-year record for RIA approvals in 2012, at 1,549. The commission changed its AUM thresholds that year, resulting in a re-sorting of firms between state and federal oversight.
If October ends with near-zero new approvals due to the shutdown, AdvizorPro projects the year’s total will still land around 1,549, which is 13% above 2024’s total of 1,369 (and would equal 2012’s record).
“Prior to the pause, 2025 was outpacing 2024 both year-to-date and on a full-year projection,” AdvizorPro co-founder Hesom Parhizkar said. “A full month of lost approvals (if October stays at/near zero) meaningfully dents that pace, but doesn’t erase the year-over-year gain unless the pause extends further.”
The U.S. government shut down in early October after President Donald Trump and lawmakers failed to agree on legislation extending federal funding. (While Republicans control the White House and Congress, the Senate couldn’t pass funding bills clearing its filibuster-proof threshold.)
At 27 days, it’s the government’s second-longest shutdown, and the first since 2018-19 (currently, the 2018 shutdown remains the lengthiest at 35 days). Although the Senate was back in session on Monday, the House remains adjourned, and Trump is abroad in Asia, suggesting the shutdown is not near an end.
As a result, flight delays are increasing as traffic controller workers are denied pay, and the Trump administration warned that food aid via the Supplemental Nutrition Assistance Program will end on Nov. 1 without government funding.
The SEC is operating with a skeleton crew of approximately 9% of its total workforce, with the rest on furlough. According to the agency’s shutdown procedures, the minimal staff is on hand to receive tips and complaints, as well as handle emergency enforcement actions or litigation.
But new registrant filings don’t qualify as urgent. Typically, a review process takes 30 to 45 days upon filing for regulatory approval, but no one is currently reviewing those submissions at the agency. It remains one of the most significant impacts the shutdown has on advisors directly.
According to MarketCounsel Chief Regulatory Counsel Dan Bernstein, the longer the shutdown lasts, the worse it becomes; for every day the shutdown continues, more unreviewed RIA registrations accumulate, which will take SEC staff longer to process when they return.
AdvizorPro data indicates that new registrations are at a standstill, with only two approvals completed this month on Oct. 1 (Parhizkar speculated that regulators cleared those approvals “right at the cusp” of the shutdown). Monthly approval accounts from April through September were 160, 158, 139, 199, 130 and 119, totaling 905 new registrations.
The shutdown has meant disruptive, potentially costly delays for some RIAs who had been preparing to launch, said Corey Kupfer, founder and managing partner of Kupfer PLCC, which works with advisors on launches and breakaways.
“We have several clients on hold,” Kupfer said. “We have a number of firms we were ready to launch, and most of them are in limbo.”
Some firms are contorting their plans to make things work. One of Kupfer’s clients was going to launch as an independent firm using an aggregator’s platform. During the shutdown, they will temporarily join the parent firm’s corporate RIA, with plans to roll off once the shutdown ends.
However, others who want to resign from their current employers and launch their own shingle “don’t have that option,” according to Kupfer.
“There’s nothing they can do. We have a couple that will be fine to wait a couple of weeks,” he said. “But if this keeps going on, it could be challenging for them as they want to be out by a particular time.”
According to Arthur G. Jakoby, a partner at the law firm Herrick and co-chair of its Securities Practice Group, non-urgent legal cases involving the SEC have “simply gone dark,” with opposing counsel and judges generally granting requests for delays from the agency.
Pre-enforcement action investigations (including subpoenas and investigative testimony) are likely at a standstill. Jakoby stressed that if a potential victim faced “irreparable injury,” the SEC would likely act even during the shutdown.
However, even when the government is operating normally, the SEC enforcement staff is limited in pursuing every case they may deem worthy. Jakoby warned that the shutdown could exacerbate the situation even further.
“Once the SEC staff goes back, they’re behind on deadlines, they’re overwhelmed with work, and they may not have the resources to go after every single case that they would’ve gone after,” he said. “They will continue the existing cases, but there might be cases that would have been started during this time period and will never be started.”