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Now, the SEC wants you to be a writer, too?

ADV Part 2 form calls for clear language, and detailed descriptions even of the people working for you

Author Les Abromovitz, Columnist September 2, 2010 at 4:32 AM
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Les Abromovitz: Your narrative should use the active voice. Words must be definitive and concrete. As always, you should be looking for language that unsophisticated investors can understand.

RIA Compliance

Richard Johnson

Richard Johnson

September 2, 2010 — 4:27 PM

A further elaboration on the Brochure and Brochure Supplement that I noticed since I have already work on these items.

There is a clause in the Part 2A instructions about how you must disclose the risks of the investments that you recommend to clients in this narrative. So, if you recommend ETF’s, then you must disclose the risks of ETF’s. To me, this means things like stock market risk, index tracking risk, credit risk, interest rate risk, exchange risk, etc. etc. This part to me is similar to a Summary Prospectus in a way.

In the Part 2B brochure supplement, you cannot list your designations unless you disclose what qualifications it took to obtain those designations, so the client can determine the value of those designations. In my case, I have 4 designations. This means that I have to disclose the qualifications and requirements for each designation, so clients can determine if they are of any value.

These two things are going to make it difficult to be short and concise in my opinion.

James Hammett, President of Advisor Consultant Net

James Hammett, President of Advisor Consultant Net

October 28, 2010 — 6:23 PM

The new narrative format will require advisers to spend more time and effort on the Form ADV Part 2. In addition, the SEC is asking for more information that was not required in the old ADV Part II.
Advisor Consultant Network, Inc. developed software and services to help alleviate the burden on investment managers, law firms, and compliance officers. The online application takes a manager from start to finish in creating and editing the Form ADV Part 2.
Visit www.netacn.com or email info@netacn.net



April 6, 2011 — 2:22 AM

It is interesting to note that your company has done the work on the instructions for Form ADV Part 2, and I am not sure whether to commend you for that or not…
But regardless, while it is very clear, there are some minor issues that could have better clarity or explanations.

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