Form ADV Archives - Page 3 of 4

Part 2A of Form ADV: Firm Brochure

Posted on March 26, 2021March 26, 2021 by admin

Rule 204-3, the brochure rule, is a requirement under the Investment Advisers Act of 1940 that requires investment advisers to provide a written disclosure statement to their clients. The rule applies to all federally registered investment advisers and specifies times during the advisory process at which they must provide the materials. To satisfy this rule, adviser can either provide clients Part 2 of the Form ADV, or they can provide an actual brochure that contains the same information that would be found in Form ADV Part 2A and 2B.

Part 2 of the Form ADV consists of:

Form ADV Part 2A: Firm Brochure
Part 2A Appendix 1 of Form ADV: Wrap Fee Program Brochure
Form ADV Part 2B: Brochure Supplement describing certain supervised persons.

This blog will cover Part 2A of Form ADV: Firm Brochure, for more information on Form ADV, check out our Form ADV blog now, or our Part 2A Appendix 1 of Form ADV: Wrap Fee Program Brochure and Part 2A of Form ADV: Firm Brochure blogs being posted soon.

Form ADV

Posted on March 22, 2021April 14, 2021 by admin

Form ADV is the uniform form used by investment advisers that manage at least $25 million in assets to register with both the SEC and state securities authorities. The Form ADV is divided into 3 parts. Part 1 is a fill-in-the blank form that contains information about the investment advisory business and how it operates. Part 2 is a brochure in narrative form that include plain English disclosures of the adviser’s business practices, fees, conflicts of interest, and disciplinary information. The last part is Part 3, which contains the relationship summary, which investment advisers are required to deliver to retail investors that discloses certain information about the firm.

The SEC Rule Change to Advisor Marketing Rules

Posted on February 5, 2021 by admin

In mid-December, the SEC adopted an amended rule to the advisor advertising rule and cash solicitation rule to reflect market developments and regulatory changes since the advertising rule’s adoption in 1961 and the cash solicitation rule’s adoption in 1979. These amendments will be the first substantive change to either rule since their inception and will create a new merged rule, The Marketing Rule, that will replace both the current advertising and cash solicitation rules.

Originally, the advisor advertising rule and cash solicitation rule were designed mainly for media such as television, radio, and newspapers. But a lot has changed since 1961 with the evolution of advertising and referral practices, advancements in technology, the introduction of the internet, and more. The Commission recognized this, stating that the new rule recognizes these changes and will “contain principles-based provisions designed to accommodate the continual evolution and interplay of technology and advice”. A few notable outcomes from this are the new rule applying to online outreach, such as adviser marketing over social media, and allowing for testimonials and endorsements.

How to Register as an RIA: Rule 203 A-2(c)

Posted on October 24, 2018 by SCM Communications

As you may remember from our earlier blogs on registered investment advisers (RIAs), whether a firm should be registered as an investment adviser with the U.S. Securities and Exchange Commission (SEC) or with a state is typically determined by the amount of regulatory assets the firm has that receive continuous and regular supervision or management (collectively known as a firm’s “regulatory assets under management” or “regulatory AUM”); with some exceptions, firms that have over $100 million of regulatory AUM must register with the SEC, while smaller advisers must register with state securities authorities instead. But, what if a new investment adviser doesn’t currently have over $100 million of regulatory AUM, but expects to soon? Is the firm required to wait until it has over $100 million of regulatory AUM to register with the SEC?

ERA: Exempt Reporting Adviser Qualification – Part II

Posted on August 16, 2018August 27, 2018 by SCM Communications

[Continued from ERA: Exempt Reporting Adviser Qualification – Part I]

SEC ERA Registration vs. State ERA Registration

Firms with more than $100 million in regulatory AUM (Large Advisers) must register with the SEC unless an exemption is available. Advisers with between $100 million and $150 million AUM solely attributable to private funds are exempt under the private fund adviser exemption, as described above. Advisers with over $150 million AUM must register with the SEC.

ERA: Exempt Reporting Adviser Qualification – Part I

Posted on August 16, 2018August 27, 2018 by SCM Communications

Per the Investment Advisers Act of 1940 (the “Advisers Act”), firms who meet the definition of providing investment advisory services generally must register either with the SEC or with state securities regulators. When the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”) was signed into law, the Advisers Act was amended to implement a new category for a narrow class of advisory firms: the Exempt Reporting Adviser (ERA).