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December 01, 2010 at 07:00 PM
Are you prepared for the changes to Form ADV Part 2? If not, you aren’t alone. A recent survey conducted by RegEd, a compliance consulting and technology solutions provider, found 45% of investment advisors say they aren’t prepared for compliance with the revised forms. Furthermore, 40% of respondents said that while they know what Form ADV Part 2 is, they aren’t aware of all the details associated with the new requirements.
“While the new rules show a good-faith effort by the SEC to improve communications between investment advisers and their clients, they do present new challenges around the creation, filing and maintenance of the required brochures,” John Schobel, CEO of RegEd, said in a release.
To combat investment advisors’ confusion surrounding the new requirements, RegEd compiled a set of guides to help advisors “distill these complex requirements,” according to Schobel.
Form ADV Part 2 is divided into two sections. Part 2A replaces the old ADV Part 2 and Schedule F, and requires advisors to provide a narrative, plain English disclosure of business practices and conflicts of interest.
“The intent of the revised Form ADV is to provide investment advisory clients with greater transparency, thereby helping RIAs’ clients to better assess the services, investment strategies, risks and conflicts of interest associated with the selection of a particular investment advisor,” according to Thomas Giachetti, chairman of the securities practice group of law firm Stark & Stark and a regular contributor to Investment Advisor.
