Tools to help with ADV Part 2 forms

Registered investment advisers still looking to submit the new ADV Part 2 forms can take solace in the fact that there are some free and low-cost options out there to help complete that arduous task

Registered investment advisers still looking to submit the new ADV Part 2 forms can take solace in the fact that there are some free and low-cost options out there to help complete that arduous task.

I wrote about two such products in the fall when they came out.

Checking back in the last week with the companies that produced the tools, I found that there were 4,800 downloads of the free template from Ascendant Compliance Management Inc. and 1,300 downloads of the Narrative Form ADV Part 2 Template available from ProTracker Software Inc. ($99 direct).

These templates are documents that contain dozens of pages of basic verbiage in the new format through which an adviser can scroll and customize specifically to his or her firm in order to complete the new plain-English ADV forms required by the Securities and Exchange Commission.

ACM is a consulting and educational firm that works with advisers. ProTracker is best known among advisers for its customer relationship management software.

I decided to download these tools and take them for a test drive.

It took me less than a minute to register and download the Ascendant zip file that contained two Microsoft Word template documents. In addition to sample language, a variety of embedded commentary and a table of contents, there is a set of nine Adobe PDF help documents.

Since introducing the free templates last year, Ascendant is offering ADV Checklists for $399. Checklists is a compliance tool that helps advisers identify all rule requirements and each component of each item on the form.

Advisers should consider them a means of proofreading against the rules once the document is complete in draft form.

The firm also offers ComplianceCasts, a web-based compliance training curriculum that offers more-in-depth guidance. These cost $195 to attend; viewing of past webcasts cost $145 for non-attendees.

A CONVERSION AID

ProTracker’s product, similar in many ways to Ascendant, is designed to help advisers in the conversion to the new ADV Part 2 forms’ Firm Brochure narrative format. The tool in turn generates the SEC-required table of contents.

The template also includes the Form ADV Part 2B “Firm Brochure Supplement,” which is information about the personnel who provide investment advice.

“You are probably not going to go wrong with either of these [tools],” said Cindi Hill, a compliance consultant.

Ms. Hill is a former adviser and founder of Hill Financial Advisors.

She said that it is difficult not to favor the very comprehensive and free offering from Ascendant.

No matter which tool advisers select, however, Ms. Hill cautioned that they should not expect the templates to do everything for them.

“You can’t just fill in the blanks,” she said, explaining that there are quite a few passages that will require advisers to spend some time framing how they conduct their business.

Ms. Hill, who consults on a broad range of compliance issues, is working with advisory firms to help them complete the new forms.

She explained that small firms can expect to pay a consultant anywhere from $1,000 to $3,000 to complete the new forms. For larger firms, with more-complex forms, the rates are obviously much higher.

As for compliance tools, there are more-complex, and therefore more-expensive, solutions available to small and midsize firms.

For example, NRS ComplianceGuardian Form ADV Architect Module is suited for smaller firms, while the RegEd compliance management solution can serve both larger RIA firms and broker-dealers.

The RegEd ADV Part 2 system carries “a nominal implementation fee” and an annual subscription, both based on the number of investment adviser representatives within a firm. The costs range from $10,000 to $150,000, based on firm size. (Check my blog for more details on these and other firms.)

DELIVERY DATES

As for deadlines, SEC-registered advisers with fiscal years ending Dec. 31 through April 30 have until July 31 to begin delivering their ADV Part 2B forms (the brochure supplements) to new clients. They have until Sept. 30 to deliver the supplements to existing clients.

SEC-registered advisers who filed ADV Part 2 by the March deadline must send the new ADV Part 2A (the so-called brochure) to existing clients by May 30.

We will also be updating our IN Tech blog with additional Form ADV tools as we find out about them.

In an e-mail exchange while putting this column together, Robin Gemeinhardt, education manager for the National Association of Personal Financial Advisors shared some additional resources.
She wrote that NAPFA offers a couple of tools to help their members on this topic. First, NAPFA Chair, Susan John, recently shared her new ADV Part II with members. This is posted on the Collaboration Corner of the Member Resources on the NAPFA website (you must be a member to access this page).
Additionally, members and non-members can purchase Ron Rhoades’ part 1 and part 2 webinars on “Understanding the Requirements of the New Rule – Form ADV, Part 2” and “A Tour through Form ADV, Part 2,” which he recorded for NAPFA in October of last year. These sessions also include a self study quiz for those that would like to obtain CFP CE for these.
Please visit the NAPFA Store for more information and to purchase these.