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As a financial advisor, it’s essential that you understand your obligations when it comes to filing Form ADV with the Securities and Exchange Commission (SEC) or the state. Many firms are preparing for their Form ADV Annual Updating Amendment filing. This task must be completed within 90 days of the firm’s fiscal year-end — typically by March 31st. Firms must also be aware of Other-Than-Annual Amendments, which can happen at any time, due to material changes in your business. Other-Than-Annual Amendments must be filed within 30 days of any material change occurring. In this blog, we will discuss what you need to know about Form ADV and what you can do to comply with its requirements.
What is Form ADV?
Form ADV is a critical document that registered investment advisers must submit annually to the Securities and Exchange Commission (SEC) or the state in which they operate. The document requires comprehensive information about the adviser’s business practices, fees, disciplinary history, and other crucial topics related to their services. Investment advisers must comply with this requirement to maintain transparency and ensure that clients and regulators have accurate and up-to-date information about their businesses.
How do I maintain compliance?
Maintaining compliance with SEC or state regulations related to filing Form ADV can be daunting and time-consuming — but there is plenty that you can do to stay compliant. First, review your current Form ADV, in detail, before filing, so that any issues can be addressed ahead of time. Second, make sure you hire an experienced attorney who specializes in securities law matters, as they will be able to advise on any complex issues that come up during the filing process. Finally, consult with other investment advisors who have experience filing Forms ADV so that you can learn from them and apply best practices moving forward.
What are the potential consequences of noncompliance?
Failing to maintain compliance with SEC or state regulations related to filing Form ADV can have serious consequences for your firm — ranging all the way from fines to the loss of your registration. If you are found to be non-compliant, you may be subject to penalties and disciplinary action from the SEC or state regulator. Additionally, clients and potential clients may lose trust in your firm, should they perceive that you are not taking your regulatory obligations seriously.
In some cases, firms may be unaware that they are out of compliance until they are audited by the SEC or state regulator. This is why it’s important to stay up-to-date with regulatory changes and work with experienced compliance specialists who can help you maintain compliance and avoid potential issues down the road.
What triggers an Other-Than-Annual Amendment?
There are several material changes that could trigger an Other-Than-Annual Amendment filing requirement. For instance, the requirement is triggered when an adviser adds a new service, changes its fees, adds or removes an office location or personnel listed on the form ADV, or undergoes changes in ownership or control of over 10% of voting securities (or similar interests). There may be other circumstances where an Other-Than-Annual Amendment is also necessary. So advisers must stay up-to-date with all regulatory changes that may impact their business.
Some examples of what could qualify as a material change that would require filing an Other-Than-Annual Amendment include:
- your firm beginning to offer a new service;
- your firm changing its fees;
- your firm adding a new office location or removing one;
- your firm adding or losing personnel who were listed on your form ADV;
- the SEC or state identifying areas where more disclosure is needed by firms such as yours; or
- your firm undergoing changes in ownership or control of over 10% of voting securities (or similar interests).
These are just a few examples of events that could trigger an Other-Than-Annual Amendment filing requirement. However, there may be other circumstances where this type of amendment is required — so it’s important to stay up-to-date with all regulatory changes that may impact your firm.
How can AdvisorLaw help?
At AdvisorLaw, our team of compliance specialists can assist you with all aspects of Form ADV filing and help you maintain compliance with SEC regulations related to investment advisory services.
AdvisorLaw can:
- review your current Form ADV to identify any potential issues before filing;
- provide advice and guidance on any complex legal matters that may arise during the filing process;
- keep you informed of any changes to SEC or state regulations that may impact your firm;
- assist with the filing of your Form ADV Annual Updating Amendment and any Other-Than-Annual Amendments, as needed; and
- provide ongoing support and assistance to help you maintain compliance in the future.
In addition to Form ADV filing, AdvisorLaw offers a variety of compliance services tailored to your specific needs through our RIA Nexus Enterprise Platform.
AdvisorLaw’s Nexus provides a centralized location for all of your compliance documents, policies, and procedures. It also offers tools and resources to help you manage your compliance program more efficiently, such as compliance calendars and training materials.
Through our RIA Portfolios & Compensation, we can assist with the creation and maintenance of investment portfolios that align with your clients’ goals and risk profiles, while also adhering to SEC guidelines. Our compensation services can help make your fee structures transparent, fair, and compliant with industry standards.
When it comes to RIA Compliance & Oversight, AdvisorLaw offers a comprehensive approach that includes ongoing monitoring and review of your business practices. Our team of compliance specialists can help identify potential areas of non-compliance and develop a plan to address them. We can also assist with regulatory exams and audits, helping you prepare for these events and navigate the process with confidence.
Through our RIA Workflows & Operations service, we help RIAs streamline their business processes and operations. We can assist you in developing and implementing policies and procedures that meet regulatory requirements, as well as conducting periodic reviews to comply with ongoing regulations.
Finally, we understand the importance of protecting your business from cyber threats. That’s why AdvisorLaw offers CyberProtection services to help safeguard your sensitive data and protect your client’s confidential information. We can help you develop and implement cybersecurity policies and procedures, conduct risk assessments, and provide ongoing monitoring and support.
AdvisorLaw’s compliance services are designed to help RIAs navigate the complex regulatory landscape and meet their compliance obligations with confidence. Whether you need assistance with Form ADV filing, RIA workflows and operations, portfolios and compensation, compliance oversight, or cyber protection, our team of compliance specialists is here to help.
Engage AdvisorLaw’s team of compliance specialists today!
Filing Form ADV is a crucial requirement for registered investment advisers, and noncompliance can result in fines and other disciplinary actions. Therefore, advisers must take necessary measures to maintain compliance and ensure that they file their Forms ADV correctly and on time. By working with AdvisorLaw, advisers can rest assured that they are meeting their regulatory obligations and remaining in compliance with the latest updates and changes to SEC regulations.
With our help, you can navigate the complexities of Form ADV filing and focus on what you do best — providing high-quality investment advisory services to your clients.