In a previous blog post, we discussed an adviser’s fiduciary duty to provide advice based on the client’s financial situation and investment objectives. In today’s post, we’ll examine the practical implications of this requirement from a compliance prospective.
Craig noted in our last entry that Advisers Act Rule 206(4)-7 (the “Compliance Rule”) requires that
To date, we have covered a myriad of topics designed to help you get your firm off the ground, focusing primarily on issues like registration, licensing, advertising, disclosure, and communicating and contracting with clients. These critical issues have one thing in common – they all involve working with folks outside your firm. Today, we kick
To our readers, we hope this entry to our blog finds you and your family safe and healthy. As we all begin to envision a path forward following the unprecedented events caused by the COVID-19 pandemic, a focus on compliance for your firm should not be an overlooked task.
For robo-advisers, this is an opportunity
If you can believe it, May 1, 2020 is almost upon us. And if you don’t remember from our February post, that is the day when advisory firms serving retail investors may start filing client relationship summaries on Form CRS. As a reminder, Form CRS gives clients a quick summary of the key things
As Josh discussed earlier this week, the annual update to Form ADV is generally due at the end of March for most robo-advisers. However, we are interrupting our current discussion thread to make sure you were aware that on March 13, 2020, the SEC extended Form ADV filing and delivery deadlines for investment advisers whose
With the deadline for the annual update to Form ADV closing in at the end of March, let’s examine one aspect of Form ADV disclosure which impacts a majority, if not all, robo-advisory firms – algorithm related disclosure.
Your firm likely utilizes a proprietary algorithm to automatically determine client asset allocation among a limited set
OK, so remember last June when we discussed registering your firm? If you do, you may recall that the principal adviser registration document, Form ADV, is divided into two parts: Part 1 (a check-the-box form that is mostly for use by the regulator) and Part 2 (a narrative brochure that is the principal client
In our last post, Craig laid out the process of advertising a performance track record. That’s great, if you have a track record. What about a newly operational robo-adviser with no performance history? Your firm likely has spent considerable resources building and developing an investment strategy and corresponding algorithm. But without a client base,
Let’s say that five years ago, you developed an investment strategy and built an algorithm to execute it. Since then, your robo-adviser has managed several client accounts using that algorithm. Much to your delight, the strategy weathered the ups and downs of the market and to date, has produced very favorable returns. Now, you want
You’re ready to advertise. You know the basics, you can handle the complexities of including past specific recommendations, and even understand how to appropriately include client testimonials. Let the advertising campaign commence! Well, not so fast. Even if you’ve successfully managed all of the potential pitfalls we’ve discussed so far, you must