Form ADV-E

What Is Form ADV-E?

The term Form ADV-E refers to an electronic form investments advisers use in order to register with the Securities and Exchange Commission (SEC) and with authorities in their home states. The form is required by the SEC and the Financial Industry Regulatory Authority (FINRA).

An electronic version of Form ADV, Form ADV-E was approved for use by the SEC in 2009. The ultimate purpose of the form is to ensure the proper handling of client assets. It contains information about the professional and the state of the practice along with a listing of client securities and holdings.

Key Takeaways

  • Form ADV-E is a required filing by custodians of financial assets on behalf of customers and provides information about the custodian and the assets held.
  • Form ADV-E is the electronic Form ADV.
  • The form is required by the SEC and is administered online by FINRA's IARD online system.

Understanding Form ADV-E

Financial professionals are required to submit regular filings to regulators and authorities about their firms, personnel, and holdings. These forms ensure that advisers and other individuals adhere to regulations and act in their clients' best interests. One of the forms that investment advisers must submit is Form ADV-E, an electronic version of Form ADV that was established in 2009 by the SEC pursuant to the Investment Advisers Act of 1940.

The form can be accessed through the Investment Adviser Registration Depository (IARD). The IARD is an electronic system that advisers use to register themselves with the appropriate authorities. Professionals are required to submit a cover page along with an accounting certification. The latter is a report that is drafted by an independent accountant who completes a surprise inspection of the securities in the filer's possession for accuracy and compliance. This information is important for all investors—both new and old—and can be used for research purposes just as you would do for any important financial decision, such as buying a new home or car.

Form ADV consists of two parts. The first part (Part 1A for SEC-registered advisers, or Part 1B for state-registered advisers) asks for information about the investment adviser’s business, ownership, clients, employees, business practices, affiliations, and any disciplinary events of the firm or its employees. This section is organized as a check-the-box, fill-in-the-blank format. The SEC reviews the information from this part of the form to process registrations and to manage its regulatory and examination programs.

As of 2011, the second part of the form requires investment advisers to prepare narrative brochures. Part 2A is referred to as the "brochure," and if applicable Part 2B is referred to as the "brochure supplement." These must be written in plain English with information such as the types of advisory services offered, the adviser's fee schedule, disciplinary information, conflicts of interest, and the educational and business background of management and key advisory personnel of the adviser. The brochure is the primary disclosure document that investment advisers provide to their clients.

Investors and other interested parties can view completed copies of an adviser's Form ADV-E on the Investment Adviser Public Disclosure website.

Special Considerations

Investment advisers are required to deliver annually to clients a summary of material changes to the brochure and either deliver a complete updated brochure or offer to provide the client with the updated brochure.

In addition, an investment adviser must deliver a brochure supplement to clients that provides information about the specific employees who act on behalf of the investment adviser. These are individuals who actually provide investment advice to the client.

When Must Form ADV Be Filed?

Form ADV must be filed no later than 90 days after the adviser’s end of fiscal year.

Who Is Responsible for Filing Form ADV-E?

Investment advisers that have custody of client financial assets or securities are required to file Form ADV-E, which makes sure advisers adhere to regulations.

What Is a Material Change for Form ADV?

Material changes must be presented on Form ADV Part 2A and include advisory personnel changes, organizational changes, and updates to the firm’s services and fee arrangements.

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  1. FINRA. "About Form ADV-E."

  2. U.S. Securities and Exchange Commission. "Form ADV Part 1A."

  3. U.S. Securities and Exchange Commission. "Final Rule: Amendments to Form ADV," Pages 1, 74.

  4. U.S. Securities and Exchange Commission. "Final Rule: Amendments to Form ADV," Pages 51-52.

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