Compliance Solutions for Investment Advisers

Common Registration Deficiencies

Applicants for investment adviser registration should not only be concerned about the accuracy of their firm’s primary registration documents (i.e., Form ADV Part 1 and Part 2A), but also that these documents, along with the firm’s advisory agreements, are consistent amongst each other. The most common areas of inconsistency are as follows:

  • The types of clients listed on Item 5.D of Part 1 does not match Item 7 of Part 2A;
  • The type of compensation listed on Item 5.E of Part 1 does not match Item 5 of Part 2A;
  • The fee schedule listed in Item 5 of Part 2.A does not match the fee schedule in your firm’s investment advisory agreement/contract.
  • How often fees are paid as listed in Item 5 of Part 2A does not match your firm’s investment advisory agreement/contract.
  • Services marked in Item 5.G of Part 1 do not match the services described in Item 4 of Part 2A.
  • Discretionary authority marked in Item 8.C of Part 1 does not match the discretionary authority described in Item 16 of Part 2A;
  • Other business listed in Item 6 of Part 1 is not discussed in Item 10 of Part 2A.

 

 

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