Q29 – How can I see a sample of another RIAs ADV?

How can I see a sample of another RIA’s ADV?

There are two primary ways to see another Registered Investment Advisor’s (“RIA”) ADV.  First, some RIA’s link to their ADV directly from their own their website. Such links are generally found at the bottom of the website, in the “disclosures” section.  The other way is by going to the Investment Adviser Public Disclosure website (adviserinfo.sec.gov) where you can look up the ADV of any registered RIA directly.

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Full Transcript:

(Editorial note: This video involves a screen share, which starts at approximately the four minute mark of the video. While the below still provides a transcription of what is verbally said, it would arguably be better to watch the actual video starting at that point.)

How can I see a sample of another RIA’s ADV? That is today’s question on the Transition To RIA video series. It is question #29.

I’m Brad Wales with Transition to RIA where I help you understand everything there is to know about why and how to transition to the RIA model.

In today’s question, a little different setting from my normal videos. The reason is because I’m going to bring up something online here and do a screen share so you can follow along with me and see how these steps work.

The question today is, how can I look at another RIA’s ADV? Maybe you’re already an RIA and you want to see how other RIAs position certain disclosures or certain verbiage they put in their ADV. You want to see and learn from that.

Or if you’re still with a captive employee broker-dealer or independent broker-dealer, and you’re exploring this idea of transitioning to the RIA model and you’ll be needing your own ADV, you might be wanting to see what one looks like of an independent RIA as opposed to probably the giant ADV that’s associated with your current corporate RIA. There is a way to easily look this up, and so that’s what I want to share with you here.

I talk a lot about ADVs in these videos. As a reminder, you use compliance consultants as the standard way to go about creating an ADV as your own RIA. Both for the initial setup and drafting of the ADV – which is what establishes your RIA in the first place – and then the maintenance of it on a going-forward basis to make sure your disclosures are being updated and your verbiage is reading as it should correctly. The ADV is an important part of any RIA.

As you look at these, don’t be discouraged and think….“how will I know how to draft all this myself if I were to transition to an RIA?” The reality is you don’t. You work with compliance consultants that help you with that.

I did a number of videos on compliance consultants, how you work with them, how much they cost. I also did videos on the steps involved in starting an RIA, which addresses the actual ADV process. I encourage you to look at all of those videos if you want to dive into it more. On today’s video though, I want to touch on….how can you go ahead and pull one up on your own if you wanted to take a look?

There are two main ways you can do that. The first is some RIAs list it on their website. They have a link. Generally, you have to scroll all the way to the bottom of the website and then there’ll be an actual link that says ADV and you obviously click on it.

Most of those links go to solely the Part 2 of the ADV. I generally don’t see folks linking to both Part 1 and Part 2, because it’s Part 2 that you’re required to disclose with the client. A lot of websites do list that. Sometimes it’ll say “disclosures” and you have to click on that and then there’ll be an opportunity from there to pull up an ADV.

Those RIAs are getting ahead of the game. The reality is you will be required to share your Part 2 at least with any prospective client and then certainly any existing clients of yours should have access to it. So some of these RIAs are trying to get ahead of that and basically say….“here it is. You don’t even have to go try to find it on your own. It’s readily accessible from our website.”

It’s not necessarily a requirement that you do that, but a number of websites do. So in theory, you could search for RIAs that are (for example) local in your town and pull them up and see if they link to their ADV.

Whether or not you find a link, or you want to even go down that path, the reality is there is a public website – which is what we’re going to dive into here today – that you can easily go to and look up any RIA’s ADV, both Part 1 and Part 2. I’m going to show you how that works here through a couple of steps and I’m going to do a screen share here so you can see that. Let me bring this up.

(Editorial note – here is where the screen share begins.)

The easiest way to start is to go to Google. If you type in “SEC RIA search”….right here at the top result, again, I searched for “SEC RIA search”, the top result is the IAPD system, the Investment Adviser Public Disclosure. In the video I did about how logistically you start an RIA, I talk about this system, the IAPD. If you’ve already seen that video, maybe that acronym is ringing a bell. If not, I encourage you to look at that video if you want to learn more about the logistics of actually starting up an RIA from a technical standpoint.

But on here, we do want to click on that top link and it’s going to bring us here to the Investment Adviser Public Disclosure website. Now, again, I went through Google. I searched “SEC RIA search”. Quite frankly, I’m so used to doing that. That’s how I’ve always found them and it pops up, but you can see here in the browser address bar, as opposed to going through Google, you type in adviser info and make sure you spell adviser correctly there, it’s E-R in this instance, adviserinfo.sec.gov will bring you to the same place.

This is basically a BrokerCheck of the RIA world, if you will. You can see here there’s two tabs. You can look up an individual. Anyone that’s an Investment Advisor Rep of an RIA – that’s the technical legal term. If you’re acting as an advisor in a fee-based capacity underneath an RIA, you are an Investment Advisor Rep (“IAR”).

You can look up anyone that is currently an IAR or was once in the past. It’s similar to what BrokerCheck does for registered reps. You can type in a name here and then find someone. But again, on this video, we’re talking about….how can we look at a firm’s ADV?

If we click on firm here, and obviously there’s a search field if you want to type in a name and then narrow it down by city, state, or zip. This is a public website. Notice that I didn’t type in any password or anything like that. This is both for industry use and for the investing public out there can go and find this on their own.

There’s no secret to this. There’s no secret sauce. It’s simply a lot of people don’t realize it exists and that it’s this easy to do. That’s why I wanted to make this video so you can see it.

Here you are and you search for firm and you can type in anything here. I’m going to type in “ABC financial” to see if…I assume someone’s maybe called themselves something along those lines. If we search for firm, and in this case, ABC financial and….we do have some results.

There’s four results. It doesn’t look like anyone’s actually calling themselves “ABC Financial.” Perhaps this is the closest, ABC Wealth. You might look at some of these other ones and….Carter Financial, NJR, Hart…why is this showing up in the results? You can see here from the teaser info – you’d have to click down into these to get the full story – but it appears this Carter Financial Group, for whatever reason, possibly as a DBA, is doing business as ABC Advisors. The one over here does have some ABC Financial… so there must be something more to it, but again, the core RIA is this Hart Investment Management.

The search tool is trying to be smart to the degree that maybe you as an investor only knew about that doing-business-as name and so that’s what you’ve typed in. We’ll go ahead and click on ABC Wealth. It happens to maybe be the closest example here.

When you click on that, it brings up and it shows the states they’re approved in and when that effective date was. Right here are the two main things I want to point out, and again, this is to be able to look at an ADV.

The main parts you might want to look at, perhaps the most helpful one is the Part 2, because that’s that narrative piece and really explains the client-advisor relationship and the services offered and things like that. If you look at – we’ll start, we’ll do them in chronological order. If you click on this one, it says….“View latest form ADV filed.” Unfortunately, I don’t know why they worded it that way, but that’s basically a fancy way of saying ADV Part 1.

If you click on that – we’ll give it a second to come up here – it’s going to be, you’ll see quite a lengthy document. It’s coming up in PDF form. Here we go. Form ADV, again, absent reference to Part 2 or anything like that, it’s essentially Part 1. You can see, it’s a lengthy document. In this case, this particular firm, 25 pages, and it answers dozens if not hundreds of different check the boxes and questions and things like that.

I walked through all of this in a prior video about how the ADV Part 1 is completed versus the ADV Part 2 but as you can see, ADV Part 1 is a lot of check the boxes. There’s really almost no narrative or free form field. It’s answers, or check the boxes yes or nos, or dropdowns or things like that.

If you come back over here, I clicked on this button to bring that up. They basically convert it in PDF form so perhaps it’s easy to print out. You can also come over here on the left bar here and there’s a link, you’ll see it….“view form ADV by section.” That’s referring to ADV Part 1. This is what we were looking at, that long all pushed together PDF.

To the degree you happen to already be familiar with the sections of an ADV….ADV Part 1, you can see over here on the left, you can jump directly to each section and say….“I want to figure out (for example) what this particular RIA’s financial industry affiliations are. You can see this one, they apparently work with an insurance company. As a sidebar, I did a whole video on that, about how you can offer insurance and how you have to disclose it on the ADV. And here’s….I happen to stumble across this, a live example of that. But again, here on the left, you can jump to whichever parts of the ADV Part 1 you want to jump into.

Going back to the main page here again, I talked about it, but clicking on Part 2 obviously is going to bring up the Part 2. And in this case, this particular RIA has also put together a wrap program. When you do that – I’ll work on a separate video of why and when you might try to put together your own wrap program – if you do that, you’re required to have a wrap brochure. That’s what you see here.

This link here, that’s going to be Part 2. We’ll give it a second to come up. It’s in PDF format. This is more the narrative document that you’re used to seeing, and you’re used to sharing with your clients. This is not a check the box or fill in the bubble or anything like that. It goes into all the fees and all the services offered. They’re generally 20-ish pages long, so this ADV is no exception on that front.

You can print them all out and take a look at them. You can tell a big difference – I don’t know if I still have it up here – ADV Part 1, this is not very visually user friendly. It does answer a lot of information, but the reality is that it asks so many questions. This is a generic form that’s used with all RIA. With any given RIA, a lot of this won’t even apply to you. There’s a lot of boxes you don’t even check, or you don’t because you answered no to something, so you skip over the next five questions (type thing).

It’s interesting information, and to the degree you or a client wanted to look at one, you certainly could. As you can tell though, the difference between how that looks and here in Part 2, which is actually more verbiage and written out and really trying to explain in plain English what the services are that that ADV is providing.

So again, an easy way….go to Google, you type in “SEC RIA search”. It’s always been for me the top result that pops up. Or you could come to this…you see in the browser window here, adviserinfo.sec.gov.

(Editorial note – the screen share ends at this point.)

I wanted to give you an example today of how you could look that up on your own. To the degree where it’s a curiosity and you want to see how other RIAs are wording things, are framing things. Or if you’re still simply considering the RIA model and you want to start to get a feel of what these look like. Whether you randomly pick a name like I did, or maybe you’re familiar with a particular RIA, they’re local to you in town and you want to bring that one up as well, that’s certainly doable. You saw how easy it was to do.

With that, like I said, my name is Brad Wales. I’m with Transition To RIA where I help advisors like you understand everything there is to know about why and how to transition to the RIA model.

Today’s topic was more to help you see what ADVs look like, to see how you can look them up because that is a big part of the “how” to transition to an RIA.

Again, you would not be needing to draft any of that yourself, or trying to figure out which of all those checkboxes to check. It’s absolutely something you work with a compliance consultant for. That’s absolutely the sort of thing that I help explain to advisors, exactly how this process works. I’m more than happy to have that conversation with you as well.

I hope you found value in today’s video, and I’ll see you on the next one.

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