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Red Oak Blog

News that affects your business and ours.
Tuesday, February 23 2016

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.