Resources

Filings Guide

Type:

Corporate Filings

Firm Filings

Rep Filings

Securities Filings

Ongoing Filings



Corporate Documents
(C-Corp, LLC)

Form ADV filing

U-4

Private Fund (registration or exemption)

Registered Fund (i.e. open/closed end funds

Annual ADV Amendment (state-registrants)

New State (Notice Filings): (SEC registrants)

Where:

Secretary of State

FINRA Web
CRD/IARD

FINRA Web
CRD/IARD

State Securities Commission

SEC Edgar

FINRA Web CRD/IARD

Jurisdiction

State

SEC (advisors act)

State (securities act)

State

(securities act)

State (Blue Sky)

SEC (Securities Act)

SEC (Advisors act)

State (Securities act)



What is RIA Consults (Roberson Consults Group)?

We offer compliance, operations, and business development consulting for RIA’s (investment advisors, private funds, hedge funds, and family offices).

We support firms with interpretation of compliance requirements such as:

1. Registration/Licensing – Assisting with SEC/State registration/firm filings/rep licensing with appropriate jurisdictions.
2. State Rules – Understanding state rules. Interpreting jurisdictional oversight and rule enforcement between the state and SEC.
3. SEC Rules – Determining Rule 206(4) – 7, 38a-1, and/or other private fund guidelines. Helping firms to implement rule policies into firm procedures.


What is RIA Review?

RIA Review is a user-friendly online compliance and operations management software designed to help boutique investment advisors to structure, to maintain, and to develop their compliance programs. http://www.riareview.com

Our platform allows solo-advisors, internal staff, and/or consultants to conduct scheduled compliance reviews to update the firm’s policies and procedures as needed.


What is RIA Products?

RIA Products features other technology providers for practice/vendor management. http://RIAproducts.com


How does RIA Review help my firm to maintain its compliance program?

RIA review is designed for firm’s to address its annual compliance requirements. Our software provides solutions to common discrepancies as noted by examiners. Overall, the software features are geared to help firms to: (1) stay on top of general compliance requirements, (2) identify errors, and to (3) stay on top of news from regulators.


What are my firm’s general firm compliance requirements?

All firms should login to the calendar section to access the general overview of annual firm requirements (i.e. to-do list of items to file with regulators and/or send to clients annually).

All firms must first register here: http://www.riareview.com/Account/Register

Note: The calendar is not an exhaustive list of every reporting requirement that may apply to your particular firm. Feel free to contact us for an interpretation of requirements.


What are the SEC’s Rule 206(4)-7 compliance program requirements?

As a part of Rule 206(4)-7, SEC-registered investment advisers (under the Investment Advisers Act of 1940) must:

1. Develop Policies and procedures: Adopt and implement written policies and procedures reasonably designed to detect, identify, or prevent violations of the investment advisors act.
2. Conduct an Annual review: Review, no less than annually, the adequacy of the firm’s policies and procedures. (i.e. updates, forensic testing, risk assessment, etc.).
3. Designate a Chief compliance officer. Designate an individual (who is a supervised person) responsible for administering the firm’s policies and procedures.


What are the state compliance program requirements?

1. Some states, such as Washington and Florida, require firms to conduct an annual review of their firm’s policies and procedures. Other states recommend firms to conduct an annual review, along with maintaining a compliance manual of firm policies and procedures.

Note: State advisors may refer to the SEC’s annual review guidelines as mentioned above.


What types of annual reporting obligations might apply to my firm?

1. Annual Offer Letter – firms should send clients a: (1) Summary of Material Changes, (2) Offer for complete ADV brochure, and (3) a copy of firm privacy policy notice.
2. ADV Annual Updating Amendment – Most firms must file an: (1) Annual Updating Amendment within 90 days after the firm’s fiscal year end (each year).
3. Financial Statements – State-registrants with: (1) Discretionary authority and/or (2) Custody of assets may be required to file annual/quarterly/monthly statements with state regulators.
4. 13F Filing – Institutional firms with more than $100 million in 13F reportable securities must make an Edgar filing within 45 days after calendar quarter end.


Who are Qualified Custodians and Administrators for Private Funds?

As defined by Rule 206(4)-2, of the investment advisors acts, these entities are:

"Independent representative" means a certified public accountant or attorney who: Acts as agent for an advisory client, including in the case of a pooled investment vehicle, for limited partners of a limited partnership, members of a limited liability company, or other beneficial owners of another type of pooled investment vehicle and by law or contract is obliged to act in the best interest of the advisory client or the limited partners, members, or other beneficial owners;

Is engaged by you to act as a gatekeeper for the payment of fees, expenses and capital withdrawals from the pooled investment;

Does not control, is not controlled by, and is not under common control with the investment adviser, investment adviser representative, or any related entity; and

Does not have, and has not had within the past two years, a material business relationship with the investment adviser, investment adviser representative, or any related entity

"Qualified custodian" means the following independent institutions or entities that are not affiliated with the adviser by any direct or indirect common control and have not had a material business relationship with the adviser in the previous two years:

A bank or savings association that has deposits insured by the Federal Deposit Insurance Corporation under the Federal Deposit Insurance Act

A licensed broker-dealer holding the client assets in customer accounts;

A registered futures commission merchant registered under Section 4f(a) of the Commodity Exchange Act, holding the client assets in customer accounts, but only with respect to clients’ funds and security futures, or other securities incidental to transactions in contracts for the purchase or sale of a commodity for future delivery and options thereon; and

A foreign financial institution that customarily holds financial assets for its customers, provided that the foreign financial institution keeps the advisory clients’ assets in customer accounts segregated from its proprietary assets.


Which firms are deemed to have custody of client assets?

All firms:
1. Who are advisors (or sub-advisors) to private funds (e.g. pooled investments vehicles) with authority to transfer assets/funds.
2. Who are trustees or have power of attorney (e.g. check writing authority or authorization to move money from a client’s bank/brokerage to a third party outside of role of discretionary trading authority).
SEC Firms:
• Who accepts a prepayment of $1200 or more for (six months or more) of advisory services.
States firms (most states*):
• Who accepts a prepayment of $500 or more for (six months or more) of advisory services. *Pennsylvania firms are deemed to have custody if they accept a prepayment of $1200 or more for (six months or more) of advisory services.


Should a firm conduct business continuity/succession planning?

Business Continuity Planning:
According to Rule 204-2 (books/records) of the investment advisors act (and similar state rules)
Firms should test and regularly update their business continuity plan at least once a year.

Succession Planning:
While drafting a plan to satisfy the SEC’s latest amendment to Rule 204-2 (and similar state rules), advisors should consider the firm’s operational/legal components. In the event of the death/incapacitation of a advisor/owner: (1) who immediately takes over to safeguard assets (operational duties during an emergency), and (2) what legal agreement is in place if the death/incapacitation of an advisor/owner prompts an estate issue* with any heirs of business, regulators, and/or other employees.
Paid software users may use our:
(1) business continuity form to organize vendors and (2) conduct testing.


What is an example of industry standard fees to charge to clients

Advisory/Portfolio Management Fees:
1. AUM based fee - Can range from anywhere between .50% - 2.5% (50 to 225 basis points)

Financial Planning Fees:
1. Flat Fee: Typically range from $500-5000 or more depending on complexity of client
2. Hourly rate: $200 and up

Consulting Fees (generally hourly structure)
1. Hourly: $200 and up.

*Note: The following is a general estimate based on research from our compliance consulting partner: RIA Consults – Roberson Consults Group.

ADV Reporting: Item 5


Which types of clients can be charged performance fees?

According to Rule 205-3 of the investment advisors act (also applies to state-registrants),
Clients must have:
• $1 million in investable assets or $2.1 million* in net worth

Pre-2011 clients: Will be grandfather into the "pre-2011" thresholds ($750,000 in assets with firm or $1,500,000 in net worth). Firms can continue to rely on grandfather clauses for these types of clients.

*Effective 8/15/2016, threshold limits were increased from $2 million to 2.1 million to factor in inflation.

ADV Reporting: Item 6


What are the common agreements needed to enter into relationship with a client/prospect?

Generally, there are four types of agreements to enter into an advisory relationship with client and/or prospect. This is outside of: (1) Brokerage agreements, (2) Estate agreements, and/or (4) Subscription documents (for private fund investors)

Advisors Contracts:
2. Advisory Contract (aka “Investment Management Agreement)
3. Consulting Agreement
4. Financial Planning Agreement
5. Solicitor Agreement


How long should I keep client books/records?

According to Rule 204-2 (books/records) of the investment advisors act (and similar state rules)

Firms should keep client records
• At least five years from the fiscal year-end date of last client transaction/activity. Records may be kept in print or electronic format.



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