Form ADV Part 2: Identifying and Disclosing Conflicts

The Form ADV Part 2 is a “plain English” narrative approach to client disclosure. Investment Advisers are required to file their disclosure brochures electronically and the public has access to these brochures via the Investment Adviser Public Disclosure (IAPD) website. This course will examine the form’s 19 specific disclosure topics, including advisory business, fees and compensation, disciplinary events and brokerage practices. In addition, the course will delve into the mechanics of the Form ADV Part 2B, “brochure supplement,” requirement. An investment adviser representative résumé-like disclosure for each individual providing advice to a client.

Both SEC commissioners and staff continue to emphasize the importance of meaningful, clear and useful disclosure, as well as the need for advisers to avoid legalese and boilerplate disclosures. Lessons learned from prior filings of Form ADV Part 2 will be reviewed to gain further clarity into how to complete the narrative in ways that will withstand current SEC scrutiny. Disclosure on the adviser’s actual practices and conflicts, as well as on practices and conflicts reasonably likely to exist, will be reviewed to highlight material facts concerning conflicts and address the requirement of how the adviser deals with them.

The course will also address:

• How to identify conflicts of interest within the framework of Part 2
• Guidance for disclosing conflicts of interest, compensation arrangements, fee structures and soft dollars arrangements, among other conflicts
• The growing implications of public access to the firm’s brochure on the Investment Adviser Public Disclosure (IAPD) website