RIA Compliance and Practice Management Blog

RIA Compliance Form ADV & Privacy Policy Annual Delivery Requirements

Posted by RIA in a Box

Apr 27, 2014 4:49:00 PM

In our experience as registered investment adviser (RIA) compliance consultants, we find that vast majority of investment adviser firms have a December 31 fiscal year end. As such, it's very likely that your RIA firm needs to fulfill its annual Form ADV Part 2 material change delivery requirement within the next few days before May 1, 2014.

To meet annual delivery investment adviser compliance requirements, both state and SEC-registered investment advisory firms need to do the following:

  • Deliver a copy of your RIA firm's privacy policy to all clients on an annual basis.
  • Inform all clients of any material changes to your advisory firm's Form ADV within 120 days of your firm's fiscal year end by doing one of the following:
    • Deliver to each client a summary of your firm's Form ADV material changes along with instructions on how a client can obtain your firm's full updated Form ADV Part 2 (or)
    • Deliver a full copy of your firm's full updated Form ADV Part 2 to clients which includes a summary of material changes.

A few other investment adviser compliance best practices to note are:

  1. While not required, as RIA compliance consultants, we generally recommend that RIA firms deliver the privacy policy and updated Form ADV Part 2 to clients at the same time to meet both annual delivery RIA compliance requirements.
  2. Remember, that before your investment advisory firm begins sending these documents electronically to a client, your firm must first have an electronic delivery authorization on file for the client. 
  3. If sending electronically to clients, you must directly attach the documents to the email. Simply providing a link to access these documents will generally not suffice as meeting your investment advisory firm's delivery requirements.
  4. Whether sending these documents electronically or by mail, be sure that your RIA firm logs this delivery for each client as part of your firm's compliance files.

How an RIA Firm Can Create a Culture of Compliance Checklist

It is important to note that during investment adviser regulatory examinations, auditors will not only want to see that the RIA firm has been properly filing annual ADV amendments within 90 days of the firm's fiscal year end, but also that the investment advisory firm has also been meetings it annual delivery requirements to clients. Thus, as investment adviser compliance consultants, we can not emphasize enough how important is to properly document and log the fulfillment of this important annual RIA compliance requirement.

 

Topics: RIA Compliance

RIA in a Box LLC is not a law firm, investment advisory firm, or CPA firm. RIA in a Box LLC does not provide legal advice or opinions to any party or client. You should always consult your relevant regulatory authorities or legal counsel if applicable.

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