It’s that time of year again - time to prepare for your annual Form ADV Review.
Disclosures to clients and prospects are even more important this year in light of new requirements announced last summer. This is arguably the most important compliance project for the quarter.
Annual Form ADV review
As you conduct your annual review, I have laid out some reminders based on recent enforcement cases, guidance about the new Regulation Best Interest (Reg BI) requirements and resources to help you address the details. This can serve as your ADV Review checklist.
Although the narrative in Part II of the Form ADV is typically treated as the core of the filing, remember to prioritize Part I and Part III.
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Consider using a “Disclosure Committee” so there is an efficient process for sign-off before the Form ADV is submitted to the SEC or delivered to clients.
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Complete a 360 Cyber review in light of recent guidance and the importance of data protection to the resilience of your business.
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Review ESG and impact claims for consistency and omissions.
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Compliance takeaways
Keeping current with regulatory changes while also doing your job and running your business is difficult. Existing registered advisors must update and file an amended Form ADV within 90 days of their fiscal year-end - the due date for 2020 was March 30, 2020. The time is now to start thinking and preparing for this important compliance deadline.
It is generally considered a best practice to complete the annual compliance review by the end of the first quarter or early in the second quarter of the year - but not required. Investment advisors should review their compliance policies, code of ethics, and overall compliance program.
Are you taking proper actions to remain compliant? Feel free to reach out if you have any questions.
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