ADV Part 2 delivery

Although many of us may be caught up in the tax deadline, for many investment advisers another deadline is rapidly approaching.

Each year an investment adviser must (i) deliver, within 120 days of the end of your fiscal year, to each client a free updated brochure (aka ADV Part 2A) that either includes a summary of material changes or is accompanied by a summary of material changes, or (ii) deliver to each client a summary of material changes that includes an offer to provide a copy of the updated brochure and information on how a client may obtain the brochure.  See SEC rule 204-3(b) for SEC registered advisers.

For state registered advisers, the deliver requirement isn’t as clear.  Many states follow the SEC requirement, but not all.  For example, Oregon requires the delivery of the entire ADV Part 2 each year.

Electronic delivery is allowed.  The SEC has published interpretive guidance on delivering documents electronically (www.sec.gov/rules/concept/33-7288.txt).  Just emailing the Part 2 to clients or uploading to your client portal each year is not allowed-unless guidelines are met.

The client must consent in writing to electronic delivery.  This can be done either by including this in your client agreement or by having the client sign an authorization.  Or the client can sign a document acknowledging receipt of the document.

For specific instructions, please look to the SEC website at www.sec.gov or for state guidelines go to the state’s website or http://www.nasaa.org.

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