Investment Adviser Registration
Investment advisers whose assets under management exceed $110 million must register with the SEC.
In addition, the following additional advisers must also register with the SEC:
- • Advisers to registered investment companies
- • Advisers whose principal office and place of business is in a state that has not enacted an investment adviser statute
- • Pension consultants, if they provide investment advice with respect to $200 million or more of plan assets
Applicants for registration must file Form ADV (“ADV” = Adviser). Once registered, an adviser must update the form at least once a year. Form ADV consists of two parts. Part 1 of Form ADV contains general information about the investment adviser, such as:
- • Information about the ownership and nature of the practice, including the names of the principals involved
- • Location of the main office
- • Types of services offered
- • Whether the adviser has custody of customer assets
- • Location of books and records
- • Any relevant regulatory/disciplinary history
Form ADV Part 2 requires an adviser to prepare a narrative “brochure” that includes information relevant to the customer, such as:
- • Fees or fee structure for the services provided
- • Types of advisory services offered
- • Methods of analyzing investments (e.g., technical versus fundamental)
- • Any disciplinary actions information
- • Any conflicts of interest
- • Educational and business background of management and key advisory personnel
It also requires an adviser to prepare a “brochure supplement” containing information about each advisory employee