ADV Part 2 Plain English Narrative

In July 2010, the SEC ruled that in an effort for greater transparency Investment Advisors must revise the Form ADV II  from a check the box format to a more straightforward "plain English" narrative format - the new ADV Part 2. The ADV II Ruling from the SEC describes the format for the "plain English" narrative and new disclosure requirements, and the SEC issued guidance on the format and what is meant by writing in plain English.

Upon completion of the New ADV Part 2, advisers must file the brochure with the SEC electronically through the IARD system and making the narrative documents public and searchable. Advisors must also provide the firm brochure to each client, even if the advisory agreement has only an oral agreement. The ADV 2 should be delivered to the client before or at the time of entering into an advisory agreement. An updated brochure should then be provided annually to each client. An interim brochure need only be provided if there are changes to disciplinary information (Item 9 of Part 2A).

ACI's Consulting Services: The New ADV II in Plain English
To develop the New ADV Part 2, ACI first verifies with your firm that the information provided on your original Form ADV II is accurate, current, and complete and updates the information accordingly. ACI then performs the function of transferring and reformatting the information on your Form ADV II into a working ‘plain English' document. Once the information has been transferred, an ACI consultant will work with the client to add the new disclosure information. After the final draft of the completed document is reviewed and approved by the client as accurate, current, and complete, ACI will upload a PDF version of the document to the IARD system.

Note: For newly registered firms that do not already have an existing ADV II to transfer into the new format, ACI will work with the firm to answer the questions required to create the draft document.

If you are interested in learning more about ACI's services for developing the ADV II in plain English, fill out the inquiry form on the right or contact info@acisecure.com / 212-668-8700.

"These amendments are designed to provide new and prospective advisory clients with clearly written, meaningful, current disclosure of the business practices, conflicts of interest and background of the investment adviser and its advisory personnel." - U.S. Securities and Exchange Commission

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