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.