Red Oak Blog
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Common Mistakes When Completing Annual ADV Update
Advisers should beware of the following common mistakes made when filing their annual amendment.
- Overstating or understating your assets under management (Remember you must keep proof of the calculations every year)
- Stating that you are doing business in states where you do not do business
- Stating that you have offices in states that you do not
- The fees listed and other parameters must match in the ADV, the advisory agreement and any advertising.
- Failing to disclose all conflicts of interest
- Failing to properly identify how fees are charged or charging fees differently than described in ADV
- Inconsistencies between services provided and services described
- Misrepresentations in description of the business
- ADV Part I and Part 2 do not match
- The types of clients listed on Item 5.D of Part I do not match Item 7 of Part 2.A.
- The type of compensation listed on Item 5.E of Part I does not match Item 5 of Part 2.A.
- Services marked in Item 5.G of Part I do not match the services described in Item 4 of Part 2.A.
- Discretionary authority marked in Item 8.C of Part I does not match the discretionary authority described in Item 16 of Part 2.A.
- Fee schedule and frequency of fees listed in Item 5 of Part 2.A does not match the fee schedule and frequency listed in the investment advisory agreement.