7.2.3.2. 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
•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 taken
•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 who provides investment advice to its clients, including educational background, business experience, other business activities, and discip