Such arrangements may include, among others, undisclosed solicitation arrangements. It is not uncommon to have a discussion with a client about whether they can pay a certain person for client referrals. Often they cannot because the person is not qualified … Continued
The 2 most common registration deficiencies: Inconsistencies in responses to similar items found on Part 1 and Part 2 of Form ADV (e.g., Item 8C of Part 1A indicates that the adviser does not have investment discretion, but the adviser … Continued
The enforcement staff gives credit to registrants that demonstrate effective compliance programs and a genuine commitment to ethical principles. Advisers should focus on persuading the enforcement staff of the quality and depth of a firm’s compliance culture and its record … Continued
The SEC has been engaging in shorter, more streamlined “presence exams” for newly registered advisers. The following five focus areas make up the bulk of these exams: Marketing; Portfolio management; Conflicts of interest; Safety of client assets; and Valuation. Streamlined … Continued
Assets under management is a defined term on Form ADV. Don’t exaggerate to stay registered with the SEC. The SEC has enforcement actions underway against multiple SEC-registered advisory firms that puffed up their assets.
Make sure you can verify your performance numbers and that you maintain all records necessary to substantiate the performance. The SEC is hunting down performance outliers. If you are posting numbers that wildly outperforms a benchmark the SEC will take … Continued