form adv 2 workshop

The ConsortiumThe Consortium

The Consortium

ADV 2Workshop

RIA Central

January 19, 2010

Nancy Liningerwww.liftburden.com

The Consortium

From ADV II To 2From ADV II To 2

ADV I ADV 1

ADV II ADV 2

The Consortium

Working PartsWorking Parts

1A – online all advisors

1B – online state-registered

2A – Investment Advisor (“Firm”) Brochure

2A Appendix 1 – Wrap Fee Brochure

2B – Brochure Supplement Supervised Person

Summary Material Changes – 2A or separate

The Consortium

Brochure Supplement – 2BBrochure Supplement – 2B

Brochure supplement for the following supervised persons:

Any supervised person who formulates investment advice for a client and has direct client contact; and

Any supervised person who has discretionary authority over a client’s assets even if the supervised person has no direct client contact.

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Brochure Supplement – 2BBrochure Supplement – 2B

Part 2B may be combined with Part 2A.

May prepare a group supplement.

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Summary Material ChangesSummary Material Changes

Identify and discuss changes:

on the cover page of the brochure or

on the page immediately following the cover page,

or as a separate document accompanying the brochure.

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Summary Material ChangesSummary Material Changes

Within 120 days of your fiscal year end deliver your annual Summary of Material Changes if there have been material changes since the last annual updating amendment.

Delivery of Summary Material Changes may be:(1) a free updated Firm Brochure that either

includes a Summary of Material Changes or is accompanied by a separate document Summary of Material Changes, or

(2) just the Summary of Material Changes that includes an offer to provide a copy of the updated Firm Brochure, and information on how a client may obtain the Firm Brochure.

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Delivery RequirementsDelivery Requirements

Part 2A

Initial Delivery

Annual Delivery

Interim Delivery

Part 2B

Initial Delivery

Annual Delivery

Interim Delivery

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Electronic DeliveryElectronic Delivery

Notice to clients

Access by clients

Evidence of delivery

www.sec.gov/rules/concept/33-7288.txt

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Ugh! Where Do I Start?Ugh! Where Do I Start?

1. Blank white screen in WORD

2. NASAA ADV 2 template with section headings: http://www.nasaa.org/industry___regulatory_resources/investment_advisers/758.cfm

3. SEC IARD website instructions & section headings: http://www.sec.gov/about/forms/formadv.pdf

4. The Consortium ADV 2 template with headings, instructions, and sample narrative: www.ADV2compliant.com

The Consortium

Main headings in order – 2A:Main headings in order – 2A:

Cover PageMaterial Changes Table of ContentsAdvisory business Fees and compensationPerformance-based fees and side-by-side management Types of ClientsMethods of analysis, investment strategies, and risk of lossDisciplinary information Other Financial Industry Activities and AffiliationsCode of ethics, participation or interest in client transactions, and personal tradingBrokerage practices Review of AccountsClient Referrals & Other CompensationCustodyInvestment DiscretionVoting Client SecuritiesFinancial InformationRequirements for State Registered Advisers

The Consortium

Main headings Part 2B:Main headings Part 2B:

Cover PageEducational Background and Business ExperienceDisciplinary Information Other Business ActivitiesAdditional CompensationSupervisionRequirements for State Registered Advisers

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The most challenging itemsThe most challenging items

Part 2A Item 8 Risk of Loss Item 9 Disciplinary History (if any)

Part 2B Item 2 Professional Designations qualifications

http://apps.finra.org/DataDirectory/1/prodesignations.aspx

Item 3 Disciplinary History (if any) Item 6 Supervision

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How long will this take?How long will this take?

Write from scratch?

Using a template?

Cut and paste from your

existing computer

document?

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IARD UploadIARD Upload

Log onto IARD: https://crd.finra.org/iad Filing type:

Annual updating amendment or

Other than annual amendment

Prepare all ADV Part 1 updates first & execution pages

Left-hand navigation panel: Part 2 hyperlink

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Complete fields for: Brochure name (e.g., [RIA name] Part 2 [date]) Brochure types (Individuals, Pension Plans...) Brochure description is not a required field

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Part 2 from navigation panel (yes, again)

Submit filing from navigation panel (you still have not uploaded your ADV 2!)

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All completeness check errors must be cleared prior to submission

Click browse to locate your document on your computer.

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Locate your document and click open.

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Don’t stop short... Warning screen opens – click OK Another screen displays – click OK again

If successful, the ADV new filing screen opens.

But you are done and you can exit.

Anything you wanted to know about IARD filing

at the Users Manual:

http://www.iard.com/pdf/firm_users_man.pdf

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More to think about:More to think about:

Advisory Agreement

Written Supervisory Procedures

PR / Marketing Brochure

Website

The Consortium

Links to more informationLinks to more information

Adopting Release Form ADV Amendmentshttp://www.sec.gov/rules/final/2010/ia-3060.pdf

ADV 2 Instructions from SEC IARD website

http://www.sec.gov/about/forms/formadv-part2.pdf SEC Division of Investment Management IARD Home Page

http://www.sec.gov/divisions/investment/iard.shtml FINRA Sponsored IARD Home Page (IARD Administrator)

http://www.iard.com/ NASAA IA Switch Center (State Securities Administrators)

http://www.nasaa.org/industry___regulatory_resources/investment_advisers/13183.cfm

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Phone #’s and websitesPhone #’s and websites

FINRA IARD (IA Firms) (240)386-4848www.iard.com

FINRA/CRD (BD Firms) (301)590-6500www.finra.org/RegulatorySystems/CRD/index.htm

SEC IARD (opinions) (202)551-6999www.sec.gov/iard

State Securities Contact (link on “Find Regulator”)www.nasaa.org

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Full DisclosureFull Disclosure

Full disclosure is simply

telling clients about your

services, fees, and

conflicts.

Full disclosure is good

customer service.

The ConsortiumThe Consortium

The Consortium ADV 2

Workshop

RIA Central

January 19, 2010

Nancy Liningerwww.liftburden.com