Changes to ADV Part 1 – Item 5

Item 5 is the part of the ADV 1 that requests information about an investment adviser’s business, including information about employees, clients and advisory activities. Again, these changes are part of the SEC’s goal to collect more and more information about advisers in the hopes of correctly assessing their risk profile.

The key amendments to Item 5 include:

(i) indicating how many of the adviser’s employees are licensed insurance agents;

(ii) providing an approximate number of clients, if over 100;

(iii) reporting the approximate percentage of its clients that are not U.S. persons;

(iv) specifying the types of clients that the adviser advises (adding categories for business development companies, other investment advisers and insurance companies);

(v) reporting the approximate percentage of assets under management attributable to each client type;

(vi) adding two additional types of services (portfolio management services for pooled investment vehicles, other than registered investment companies and educational seminars or workshops); and

(vii) reporting whether they provide investment advice with respect to limited types of investments.

 

Leave a Reply