How Your Investment Advisers Can Streamline the Annual Form ADV Delivery Requirements

May 30, 2013

An investment adviser is required to prepare and submit a completed Form ADV as part of the initial registration process.  In addition to the review by the U.S. Securities and Exchange Commission (“SEC”) or state securities regulator(s) for purposes of determining whether to approve or deny an application for investment adviser registration, the Form ADV Part 2 is also used as the investment adviser’s disclosure document which is required to be provided to all investment advisory clients.

Additionally, an investment adviser registered with the SEC must meet certain requirements concerning the delivery of the investment adviser’s disclosure brochure, Form ADV Part 2A. Under SEC Rule 204-3(b), each year, within 120 days of the investment adviser firm’s fiscal year end, the investment adviser must deliver to every client an updated disclosure brochure that includes a summary of material changes or deliver to every client a summary of material changes that includes an offer to provide a copy of the updated disclosure brochure and information on how a client may obtain a copy of the brochure. Upon a client’s request, an investment adviser must provide a copy the firm’s Form ADV Part 2A. As part of a regulatory exam, an investment adviser may be required to prove compliance with the disclosure brochure annual delivery requirements.  Investment advisers should keep a dated copy of the annual offer letter and a list of all clients that it was sent to.  Additionally, investment advisers should maintain a log of all clients that requested a copy of the disclosure brochure and indicate the date that the disclosure brochure was delivered to the client.

Most state securities regulators have similar disclosure brochure delivery requirements for state registered investment adviser firms.  State registered investment advisers should review the applicable state securities regulations to make sure that the investment adviser properly complies with the state securities regulations for disclosure brochure delivery requirements.

In efforts to help your investment adviser streamline the Form ADV delivery requirements, RIA Compliance Consultants has available for purchase a sample Form ADV Annual Offer letter. Your investment adviser may use the sample Form ADV Annual Offer letter to send to your advisory clients to notify them of material changes made to your Form ADV Part 2A disclosure brochure and to offer, upon request, a copy of the most current disclosure brochure and privacy policy notice. If your advisory client requests a copy of your firm’s most current disclosure brochure and privacy policy, mark your calendar to send out, within 120 days, the requested forms. Your investment adviser should also track and record any requests received by your advisory clients for the updated documents and the dates the forms were delivered.

In addition to the sample Form ADV Annual Offer letter, RIA Compliance Consultants offers several other forms that your investment adviser may use to complete the ongoing compliance requirements pertaining to the Form ADV delivery requirements.

  • Form ADV Request / Receipt Log: Track and document clients’ requests for a copy of the firm’s Form ADV.
  • Form ADV Revisions Log: Document reviews and changes to the firm’s Form ADV.
  • Customer Privacy Policy Notice: An investment adviser firm must provide a privacy policy notice to all clients at the time of engagement and annually thereafter.  This document contains three templates for your reference and possible use.

By clicking here, your investment adviser firm can purchase for only $25 any of the above mentioned sample forms from our online store.

Posted by Bryan Hill
Labels: ADV Annual Offer Letter, Annual ADV Offer Letter, Compliance Forms, Compliance Program, Compliance Tool, Compliance Training