The new Form ADV Part 2A, or Brochure, shall take the place of an investment advisor’s old ADV Part 2 and Schedule F. ADV Part 2A contains 18 disclosure items, each to be included in the investment advisor’s Brochure, and each to receive a narrative, plain English response. There is significant overlap between the required content of the new ADV Part 2A and the content that was required by the old ADV Part 2 and Schedule F. The intent of the revised Form ADV is to provide investment advisory clients with greater transparency, thereby helping clients better assess the services, investment strategies, risks and conflicts of interest associated with a particular investment advisor. The ADV Part 2A must be filed electronically through the Investment Adviser Registration Depository system by all investment advisory firms.
Unlike the old ADV Part 2 and Schedule F, the new ADV Part 2A does not require a section in which investment advisor representatives of the firm are listed with their education and business backgrounds. Instead, investment advisors shall be required to provide investment advisory clients with a Form ADV Part 2B, or Brochure Supplement, for each representative who provides that particular client with advisory services. The Brochure Supplements must be delivered to the client before or at the time a representative begins to provide advisory services to a client.
A Brochure Supplement shall detail the educational background and business experience of each investment advisor representative, just as the old Form ADV Part 2 and Schedule F previously required. However, unlike the old Form ADV Part 2 and Schedule F, the Brochure Supplement must also detail any legal or disciplinary events material to a client’s, or prospective client’s, evaluation of the investment advisor representative.