• Rita Rhodes

Welcome, 2021!

Happy New Year!

Holidays are great, but to be honest, it always feels good to me to get back to a normal work week. I like routines and schedules, and for the past couple of weeks, I felt a little askew, never knowing quite what day it was.

There's a lot to do this quarter, so let's dive right in!

The Final Renewal Statements were posted on the IARD system this past weekend. Unless you added/removed registrations for your firm or your IARs between the time the Preliminary Renewal Statements were issued in November and the end of the year, you should not have any additional fees. However, it's always a good idea to log in and retrieve your final statement, just to be sure it has been paid in full. If any amounts remain due, the balance should be paid by January 22.

For advisers whose fiscal year end is 12/31 (which is the vast majority of advisers), now begins the ADV annual update season. It's time to start reviewing your current Part 1 and noting any edits, as well as gathering your 12/31 data necessary for the update. The Part 1 annual update is due 90 days from your fiscal year end, or March 31.

You also need to deliver a Summary of Material Changes to your Form ADV Part 2 within 120 days of your fiscal year end, or by April 30. So most advisers will update their Part 2 disclosure documents in conjunction with the Part 1 update.

If you are an SEC-registered RIA, you should also take a look at your Part 3 (Form CRS) to see if any updates need to be made (particularly if you've modified your Part 2 disclosure documents), and submit that at the same time as your Part 1 filing.

You can be sure that if you are ever examined, your regulator will review your Part 1, Part 2, and Part 3 (if applicable) along with your client agreements and written policies and procedures. So while you are reviewing and updating your ADV documents and things are fresh in your mind, it's also a good idea to at least take a quick pass through your other documents to make sure that they all agree with each other on key issues like description of services, fees, and conflicts of interest.

In other news....

The SEC delivered a surprise Christmas gift by adopting a new Marketing Rule on December 22. The new rule supersedes the prior advertising and cash solicitation rules, both of which were greatly in need of modernization to reflect today's technology and business practices. The release document is 400+ pages long, and compliance nerds like myself are taking time to digest and analyze the new regulations. It significantly impacts solicitation arrangements and advertising practices, including the use of testimonials and endorsements. More to come on this, after I have time to more fully analyze the new rule. The rule becomes effective 60 days after it is published in the Federal Register (which hasn't happened yet, as of this writing), and advisers have 18 months from the effective date to come into compliance. No need to panic about how to update your ADV this year to accommodate the new rule; updates can be addressed next year.

As always, let me know if you have any questions. Happy to help!


0 views0 comments

Recent Posts

See All