SEC Form ADV-E

SEC Form ADV-E includes a certification of client assets, both cash and securities, that are held by a Registered Investment Adviser. The SEC Form ADV-E is used chiefly by accountants. It contains information about the adviser and the state of the practice along with a listing of client securities and holdings.

SEC Form ADV-E is required by the SEC pursuant to the Investment Adviser's Act of 1940. It is evaluated by an independent accountant for accuracy and compliance. The ultimate purpose of the form is to ensure proper handling of client assets.

The information contained within a Form ADV is important for all potential and current investors — just as you would thoroughly research any important financial decision, like buying a home or a car.

More formally, Form ADV is the uniform form used by investment advisers to register with both the Securities and Exchange Commission (SEC) and state securities authorities. The form consists of two parts. Part 1 requires information about the investment adviser’s business, ownership, clients, employees, business practices, affiliations and any disciplinary events of the adviser or its employees. Part 1 is organized in a check-the-box, fill-in-the-blank format. The SEC reviews the information from this part of the form to process registrations and manage its regulatory and examination programs.

Beginning in 2011, Part 2 requires investment advisers to prepare narrative brochures written in plain English that contain 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.

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 to clients a brochure supplement that provides information about the specific employees, acting on behalf of the investment adviser, who actually provide the investment advice to the client.