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(Updated) RIAs stumble at ADV form goal line

SEC's still mum about what will happen to procrastinators; states adopting laidback approach

Author Tommy Fernandez April 4, 2011 at 2:05 PM
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LInda Cena: Michigan's top RIA regulator, says one advisor recently told her, "Unless we have a direct connection with God, we’re not going to complete all the ADV forms."

RIA Compliance


Women of Wealth Management

Jack O'Hara - AdvisorAssist

Jack O'Hara - AdvisorAssist

March 18, 2011 — 5:29 PM

There is an anomaly to the ADV 2 deadline. Earlier this month the State of Colorado, acting on its own, extended the deadline for the new ADV 2 to June 30, 2011. This is the only state we’re aware of that has taken such action. While states generally adopt SEC rules, they are responsible for their own advisors and can create their own rules.

I think it would be an irrational strategy to plan on being late, and then hope for mercy from the SEC or state if the RIA doesn’t meet the deadline set last summer. With that said, I think any action taken by a firm that demonstrates a sincere, bona fide best effort to meet the deadline will be viewed favorably. With a full two weeks remaining, I would tell an RIA to do whatever they can to show that effort. If you are late, be proactive and then get it in ASAP. A couple days may be understandable, but a long delay could be a real issue.


Jack O’Hara

Todd E. Schwartz

Todd E. Schwartz

April 4, 2011 — 6:18 PM

We gave up trying to figure out what each state and the SEC was requiring. It was a headache.

Instead, we simply informed clients our own self imposed deadline was 3.31.11. Worked like a charm.

Now the real fun begins when we begin receiving conflicting feedback from the states and, eventually, the SEC.

Here’s a good one: In some cases we are being punished for using “plain English”.

A certain amount of the feedback we are receiving from the sates requires exact language. The exact language is not in plain English.

Has anyone tried informing a regulator their writing skill is poor? Or perhaps suggesting they sponsor a bill requiring statutory language to be in plain English?

Todd E. Schwartz
Schwartz Law Group

Peter Mafteiu

Peter Mafteiu

April 6, 2011 — 7:36 PM

If you look on the state’s websites, you’ll see where they “extend” the Part 2 A deadline for state registered advisers in their state. Realize, that if the IA is only registered (for example in Michigan) then Michigan provides the extension to those IAs that are ONLY registered in Michigan (and no other state).

Also, Pennsylvania extended the deadline to September 30th (see the State’s website) for those IAs that are registered in PA only.

If a State Registered firm is registered in more than one state, compexities surface. If your home state is MI or PA and they extend the deadline, you do not derive the benefit due to the other states where the deadline (March 31 if your FYE is 12/31) has not been extended.

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