Form ADV Part 1 Annual Amendment. As we are now securely in the first quarter of 2018, many registered investment advisor (RIA) firms are reviewing their Form ADV Part 1 Annual Amendment. This review is in preparation of updating that filing and submitting it by the deadline of March 31, 2018. These are RIA firms that have a December fiscal year end.
New Form ADV Part 1 Questions
This year, with the Form ADV Part 1 Annual Amendment registered investment advisors will encounter the ‘new’ questions that were incorporated in the Form ADV Part 1 as of October 1, 2017.
While there are many new questions to consider, clarity needs to be provided for two questions, in particular. Section 5, Information about your Advisory Business – Employees, Clients and Compensation. Specifically, Question 5K (1) Separately Managed Account Clients. For purposes of the Form ADV, “Separately Managed Account clients” are generally defined as all of your clients who investment advisors provide advice to EXCEPT, private funds, business development company and mutual funds. Outside of private funds, business development company and mutual funds, all other types of ‘clients’ come under this term. (i.e., individuals, High Net Worth individuals, corporations, pension plans, etc.).
The next question is Question 5K (4). This is the question that is asking the advisor to provide the name of the custodian(s) that holds 10% or more of your client’s regulatory assets under management. The reporting on the corresponding schedule for Question 5K (4) is to include the name of the custodian/address, CRD/SEC number and the corresponding assets held by that custodian(s).
As mentioned above, there are many more ‘new’ questions this year on the Form ADV Part 1 than what has been mentioned here, however, this information is intended to help provide more guidance on the spirit of information that needs to be provided for the two questions mentioned.
If you need assistance with your Form ADV Part 1 Annual Amendment filing or any other investment advisor compliance needs, contact Registered Advisor Services today for a free consultation!
