Something I have been coming across frequently of late, the thought that as a fee-only RIA, the firm is unbiased and has no conflicts of interest. Let me be the one to dispel that thought – you do have biases and conflicts of interest.
A scenario that proves the point; if you have client work to do and want to leave the office to go home for dinner or to be with your family, you have a conflict of interest. It is a real stretch of the idea, but you get my point.
When reviewing your Part 2 of Form ADV, be sure to keep this in mind when discussing your conflicts of interest. “As a fiduciary, you must seek to avoid conflicts of interest with your clients, and, at a minimum, make full disclosure of all material conflicts of interest between you and your clients that could affect the advisory relationship.” (from the General Instructions for Part 2 of Form ADV)
I was asked recently if it should be disclosed that the advisor spends part of the year in another state. Based on the item above, I believe this information should be disclosed. A prospective client should be aware of this information in advance of becoming a client.
So when performing your annual review of compliance documents, per the Compliance Program Rule 206(4)-7, which many advisors complete during the summer months, look at it with fresh eyes. What changes can be made to include all your conflicts of interest.