Did your Firm Renew for 2010? Don’t Forget About Form ADV Annual Amendments

January 13, 2010

Now that we are into a new year, can you confirm your registered investment advisor and its advisor representatives were properly renewed for 2010? Every year there are always a handful of firms that fail to submit renewal fees through the IARD system in a timely fashion. Therefore, even if you think the renewal payment was sent in time, please make sure your firm retrieves the Final Renewal Statement and confirms it is renewed for calendar year 2010.

The Final Renewal Statement will indicate one of the following.

Paid in Full – If your firm’s renewal statement has been paid in full, the renewal process is complete. You should print a copy of the Final Renewal Statement and file it with your firm’s books and records.

Outstanding Balance Due or Refund – If your firm paid its Preliminary Renewal Statement in full, but added or removed a state registration or advisor representative during the time period between the posting of Preliminary Renewal Statements and the 2009 shut down period, then your firm will either have additional fees due or receive a credit. If additional fees are due, the fees should be submitted as soon as possible, but must be posted by February 5, 2010. If your firm received a refund, the credit will automatically be transferred to your firm’s Daily Account.

Failed to Renew – If a firm’s Final Renewal Statement indicates Failed to Renew, FINRA did not receive the total balance due on the Preliminary Renewal Statement prior to the December deadline. In these cases, it is standard operating procedure for FINRA to automatically terminate all advisor representatives of the firm. In addition, over thirty states have given FINRA the authority to automatically terminate a registered investment advisor that does not pay its renewal fees in full. If your firm’s statement indicates Failed to Renew, you will need to contact each state jurisdiction immediately to determine an appropriate course of action.

It is important to make sure your registered investment advisor submits all required documentation directly to the states where the firm is registered. If your firm failed to renew through IARD, it is important to take immediate action to rectify the situation. Give us a call to find out more about our re- registration services and pricing.

In addition to confirming your firm’s registration renewal for 2010, we would like to remind registered investment advisors of their responsibility to prepare and file their Form ADV Part 1 Annual Amendment. The Annual Amendment must be filed no later than 90 days after a registered investment advisor firm’s fiscal year ends. Many registered investment advisors use December 31 as their fiscal year end which results in a March 30, 2010 deadline to submit the Annual Amendment through the IARD system. The Annual Amendment is used to update information such as number of clients, number of accounts, and assets under management. We recommend registered investment advisors closely review the entire Form ADV to confirm all information is correct.

SEC registered firms should be aware that the SEC and FINRA have reinstated the annual IARD Firm System Processing Fee. The fee is assessed for the electronic filing of forms on the IARD system. The IARD Firm System Processing Fee is separate from applicable state Notice Filing fees. It must be paid by SEC registered firm when filing the Annual Amendment. Firms can begin working on the Annual Amendment, but will need to fund their IARD Daily Account before they can submit the Annual Amendment.

Please refer to the following schedule to determine your firm’s annual fee and submit payment to your firm’s IARD Daily Account. Be sure to fund the Daily Account; do not fund the Renewal Account: (a) for assets under management of less than $25 million, there’s a fee of $40; (b) for assets under management between $25 million and $100 million, there’s a fee of $150; and (c) for assets under management over $100 million, there’s a fee of $200.

Please contact RIA Compliance Consultants, Inc. if you are interested in our Form ADV Annual Amendment services. We would also like to invite you to attend our upcoming webinar on January 14, “Preparing the Form ADV Part 1 Annual Amendment”. The registration fee for our webinar is $59.95. During this webinar, RIA Compliance Consultants will discuss the items that must be updated as part of the Form ADV Part 1 Annual Amendment including how securities regulators expect a registered investment advisor to calculate assets under management. In addition, we will review common mistakes when preparing the Form ADV Part 1 Annual Amendment. Finally, we will cover some common examples of material changes that should have been updated to your Form ADV during the past year.

Posted by Bryan Hill
Labels: Annual Amendment, Form ADV, IARD