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I would like to take this opportunity to thank all of my clients over the last year and beyond.  It has been my pleasure to work with some really great people and I look forward to continuing that trend in 2017!   I wish you all good health and happiness in 2017!

Tomorrow, December 16, 2016 is the final day to confirm your Investment Advisor Registration for 2017!  Be sure to fund your account at FINRA with your 2017 renewal fees to keep both your firm and your investment advisor representatives (“IAR”) registered in the upcoming year.  Nonpayment of these fees will mean that your firm and IARs are not registered come January 2, 2017 and you will then need to re-register both.  That registration process can take up to two months to complete.  Don’t be left without a valid investment advisor registration!  Contract Registered Advisor Services today for assistance with your ongoing compliance needs!

As we approach the end of 2016, this is a good time of year for registered investment advisors to review their investment advisor compliance filings.  At the end of every year, I provide my clients with a year-end checklist to quickly review and confirm that they have met their investment advisor compliance requirements over the past year.  Briefly, the more immediate investment advisor compliance requirements are as follows:

• Fund your FINRA account by December 16, 2016 to pay your 2017 Renewal Fees;
• Begin your review of your Form ADV Part 1, Form ADV Part 2A Brochure, Form ADV Part 2B Brochure Supplement in preparation of your annual amendment filing for 2017.  Registered Advisor firms with a December fiscal year end, the filing is due by March 31, 2017;
• In early February, FINRA will send your Super Account Administrator an email in order to confirm the users on behalf of your firm on the FINRA systems. Be sure to follow the instructions in that email by the deadline to not be locked out of that system.

These are just a few of the more immediate investment advisor compliance filing requirements.  Need assistance with your firm’s overall compliance requirements?  Contact Registered Advisor Services today and learn how we may partner together to keep your firm compliant!

Recently, it has come to my attention that some state registered investment advisors are not aware that they have an RIA state compliance requirement whereby they need to send an invoice to their clients outlining their management fee, and the calculation of that fee, that is deducted from the client account.  Here’s a tip!  State registered advisors should review their Form ADV Part 1, Part 1B Item 2.I. Custody and review the four questions under the topic of Advisory Fees.  This is the state section of the form that sets forth your RIA state compliance requirements so that you are not deemed to have custody of your client funds because of automatic fee deduction from the client account.  I am aware of several state registered RIA firms that have been examined this year by their state regulator, and all of them were asked to produce copies of the invoices they sent to their clients to meet this RIA state compliance requirement.  Make sure you are not caught by surprise!  Review your RIA state compliance requirements today along with your Form ADV Part 1 and contact Registered Advisor Services if you need assistance with your ongoing compliance requirements.

Today, the Department of Labor (DOL) issued their first Question & Answer (Q&A) series providing clarification for RIA Compliance Fiduciary Rule.  The DOL will be issuing a total of three Q&As to help provide guidance and understanding of the provisions of this new rule.  RIA compliance with the new rule is April 10, 2017.  RIA advisory firms and others are strongly encouraged to begin reviewing your investment advisory business practices now and determine how you will best comply with these new provisions.  For assistance with understanding the Fiduciary Rule, contact Registered Advisor Services today!

In the meantime, click here for the first Q&A! 

NASAA recently announced, the FINRA Investment Advisor Representative Fees for 2017 will continue to be significantly reduced.  The amount that FINRA charges for Investment Advisor Representative fees who are state registered is $45 per individual.  Over the past couple of years, the state regulators have been sensitive to the cost of compliance for small registered investment advisor firms and have helped to keep their costs down by substantially reducing the investment advisor representative registration fee that FINRA charges.  That FINRA fee has been reduced from $45 to $10 per investment advisor representative.    This announcement is timely as registered investment advisor firms are quickly coming up on the time of year when they have to pay the state fees to keep both their firm and investment advisor representatives registered for the upcoming year.  Click here for more information from NASAA!

It is hard to believe that we are entering the fourth quarter of 2016 and FINRA Renewals 2017 are already upon us!  Registered Investment Advisors, both state and federally registered, are required every year during the fourth quarter to pay their firms FINRA Renewal fees in order to maintain their registration in the upcoming year.  That is, both the registration of your investment advisory firm and that of your Investment Advisor Representatives (IARs).  Not paying the FINRA Renewal fees 2017 timely will result in your investment advisor firm and IARs not being properly registered for 2017.  No one wants to face going through the registration process again so be sure you timely pay your FINRA Renewals 2017!  Click here for the important timeline for payment.

If you need assistance with the Renewal process, contact Registered Advisor Services today for a free consultation!

The SEC Form ADV amendments were adopted on August 25, 2016.  These amendments will impact both SEC and state registered investment advisors.

Briefly, the amendments include:  (1) requiring investment advisors to provide information related to their separately managed account (SMA) business; (2) enable private fund investment advisers to file an ‘umbrella registration’ for separate investment advisors that operate as a single investment advisory business; (3) amend Rule 204-2 under the Investment Advisers Act of 1940 to require investment advisors to maintain records that demonstrate performance calculations or rates of return in any written communications and maintain certain additional records; and (4) additional, clarifying and technical amendments to the Form ADV.

In addition to these SEC Form ADV amendments, the SEC amended the Investment Advisers Act Rules as well to create further clarification.   Rule 204-2(a)(16) currently requires investment advisers to maintain records supporting performance claims in communications that are distributed or circulated to 10 or more persons. The SEC has amended this rule and now requires an investment adviser to maintain these records in communications that are distributed or circulated to “any person.”

Adjustments to Rule 204-2(a)(7) impose additional recordkeeping obligations on investment advisers to maintain original records of all written communications received and copies of all written communications sent related to the performance or rate of return of any or all managed accounts or investment recommendations. Investment advisers were previously only required to maintain records of correspondence that fall into certain categories. The SEC noted that most investment advisers already maintain the information that will be required to be maintained under amended rule 204-2, and the rule change does not require advisers to print out and retain hard copy “originals.”

The compliance timeline for the Form ADV and Advisers Act amendments and compliance with these changes is for any investment adviser filing an initial Form ADV or an amendment to an existing Form ADV on or after October 1, 2017, will be required to provide responses on the updated form. In many cases for investment advisers with a December 31 fiscal year, this will result in their first direct exposure to the new form taking place in connection with their annual Form ADV updates due at the end of March, 2018. Amendments to the Advisers Act books and records rule will apply to communications circulated or distributed after October 1, 2017. Investment Advisers that circulate or distribute communications after October 1, 2017, that includes performance information, including information on performance that predates that date, will be required to maintain the materials required by the Amendments that demonstrate the calculation of the performance.

Contact Registered Advisor Services today to learn how our annual ongoing compliance service will help you to meet these new SEC Form ADV amendments and rule changes!

The state of Minnesota released its investment advisor compliance bulletin outlining their findings after conducting a series of routine exams of investment advisor firms registered in the state of Minnesota.  The Minnesota Department of Commerce has received feedback after presenting at industry conferences about their exam program where attendees requested more information about common deficiencies during the state’s exams.  Generally, the common deficiencies found by the Minnesota Department of Commerce are:

• Form ADV Annual Renewal and Updates not timely filed, or filed at all;
• Bonding Requirements and the failure to post a bond;
• Custody Safeguards;
• Investment Advisor Registration.

To read more about these findings, here is the Bulletin.  Even if your investment advisory firm is not registered in the state of Minnesota, these findings easily apply to any state registered investment advisory firm.  Investment advisor compliance is important to maintain on a current basis.  Call Registered Advisor Services today to learn more about annual compliance service!

A Form U4 is a document that is used by both broker dealers and registered investment advisors to license and register individuals with their firm.  The Form U4 is completed online and submitted through the CRD (Central Registration Depository) system that is operated by FINRA.  For Investment Advisor Representatives (IARs) of Registered Investment Advisor (RIA) firms, even though FINRA operates the CRD system, the IAR is not regulated by FINRA by rather the state regulators in the state where the IAR is located and registered.  The Form U4 can also be used to open a window to take either the Series 65 or the Series 66 exam that is required by the state regulators for IARs.  This is true even for federally registered investment advisor firms.  Often, clients considering registering their own investment advisory firm are not aware that they, as the individual who will be providing advice to advisory clients, also need to be licensed and registered with their own investment advisory firm.  If you are considering registering your own investment advisory firm and have questions about the process, including the Form U4, call Registered Advisor Services today for a free consultation.  We would be happy to assist you with your registration.