Completing the New ADV Part 2 in Plain English

ACI provides guidance to investment advisor firms who need assistance converting their ADV Part II from the check the box format to the new ADV Part 2 plain english narrative format based on the SEC ruling this past July. The final ruling from the SEC on the new ADV Part 2 details the format for the "plain English" narrative and new disclosure requirements. The SEC provided additional guidance on the format and information to be included in the New ADV Part 2 and the following guide on what is meant by writing in plain English.

For many firms, even with guidance, this still proves to be a difficult process or simply not something that there is time to address with competing regulatory priorities. For this reason, ACI is working with our clients to manage the conversion and writing process to the New ADV Part 2 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 and Form ADV II is accurate, current, and complete and updates the information accordingly if it is not. ACI then performs the administrative function of transferring and reformatting the information on your Form ADVII into a working ‘plain English' document, the new ADV Part 2. Once the information has been transferred to a working draft document, an ACI consultant will review the document with your staff to make the necessary revisions and 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. The narrative documents will be public and searchable making this a highly important document that should be completed with care.

The advisors must also provide the firm brochure to each client, even if the advisory agreement is only an oral agreement, and the ADV 2 should be delivered to the client before or at the time of entering into an advisory agreement.

"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

For more information on working with ACI to develop your ADV Part 2 in plain english contact info@acisecure.com or 212-668-8700.