For those investment advisory firms with a fiscal year end of December 31st, it that time again for making annual updates to Form ADV. Core Compliance & Legal Services, Inc. recently published a Risk Management Update (“RMU”), which contains, among other things, guidance on disclosure areas that firms should consider when reviewing and draft updates. The RMU also outlined the following compliance tips regarding Form ADV filings:
- Confirm the appropriate fee is in the firm’s IARD Flex Funding account before filing.
- Provide operations personnel with training, including a copy of the SEC guidance on calculating regulatory assets under management contained in the Form ADV instructions, and backup documentation substantiating the calculation is maintained as part of the firm’s records.
- Discuss with senior management the current and anticipated changes to the adviser’s business (including affiliate activities) for purposes of updating the disclosure brochure.
- Have area managers review pertinent sections of Forms ADV Part 1 and Part 2A prior to filing.
- Provide investment adviser representatives with a copy of their current Form ADV Part 2B and Form U-4 to determine if changes or updates are necessary.
- Compare Form ADV Part 1 with ADV Part 2A for consistency of disclosures.
- If annual delivery to clients will be made via email, ensure that all clients have provided the firm with requisite authorization and be able to prove delivery was effective.
- If relying on wrap sponsors or other third parties to make the annual delivery to certain clients on the firm’s behalf, obtain proof of delivery to ensure compliance with Rule 204-2(a)(14) of the Investment Advisers Act of 1940.
Click here for a full copy of our RMU titled “Form ADV – Disclosure Reminders and Beyond”. The link also takes you to our RMU library, which includes insightful articles on a wide range of industry topics.
Should you need guidance or assistance with Form ADV filings, please give us a call at (619) 278-0020.