Conquering Current Compliance Challenges
Aug. 14, 2019 | 2:00 - 2:30 PM EST

Conquering Current Compliance Challenges
Recorded: June 11, 2019 
Includes: Best Practices, Key Regulatory Issues and Compliance Tips
Includes: 23 Best Practices, 5 Peer-tested tools and 15 No Action Letters

Form ADV Analyzer

Learn how consistent, or inconsistent, your regulatory filings are with the market and see how the SEC would view your filing!

Form ADV Analyzer utilizes the filings of over 35,000 SEC and state-registered advisers and houses over 220,000 historical Form ADVs filed since 2013. This data allows you to test your firm’s accuracy, consistency and frequency against your peers to see if you’re an outlier in the SEC’s eyes.

Since you currently have limited insight into how your filings compare to the market, you don’t know whether your Form ADV filing practices create unintended risks to yourself and your firm.

That’s where Form ADV Analyzer comes in.
Form ADV Analyzer looks at your current and previous year’s Form ADV and scores the quality of your ADV filing compared to the market. The SEC has started using more sophisticated data mining techniques to determine weak and strong compliance cultures and uses the results to target advisers for exams.

We do too.

If Form ADV Analyzer sees errors in your filings, so does the SEC. The resulting Form ADV Analyzer report gives you and your firm insight into how the SEC profiles your firm and identifies the problem areas that you need your attention.

Here's what you know
  • The SEC collects mass data to identify the accuracy, consistency and frequency of your Form ADV filing.
  • The SEC uses advanced data mining and analytics to scrutinize your filings.
  • The SEC uses the data in your Form ADV to find anomalies and bad actors to select for exams.
  • The data in Form ADV is dependent on the quality of the input received from the CCO’s input suppliers.
  • The CCO is personally and professionally liable for the data contained in the firm’s Form ADV.
  • You do your "best" to file an accurate Form ADV.
Here's what you DON'T know
Form ADV Analyzer
  • How your Form ADV stacks up against other SEC and state-registered firms in the market.
  • What the SEC can see in your current and prior Form ADV using sophisticated analytics that will flag you for an exam.
  • Which areas of your compliance program and Form ADV filing will be flagged as weak or need attention.
  • Whether or not you are already in the crosshairs of SEC examiners based on your last filing.
  • How your "best" compares to the market.

With your custom report from Form ADV Analyzer you’ll be able to gain insight into how you score against your peers based on your last two Form ADV filings. It also identifies which specific areas of your compliance program and Form ADV that need attention so you can improve your accuracy, consistency and frequency and identify areas of your compliance program that need improvement.

Form ADV Analyzer gives your firm an overall quality score and rates you on three main areas important to the SEC – accuracy, consistency and frequency – while identifying where your compliance program and Form ADV filing needs help.

Where your firm sits compared with the market reveals key insights into your commitment to a strong compliance culture. Advisers who know where they compare to the market and why, can take direct action to reduce the regulatory and legal risks of being an “outlier”.

Overall Quality Score:
  • Your firm’s ranking reveals insights into your commitment to your firm’s compliance culture.
  • Advisers with lower Overall Quality Scores that are in, or close to, the “left-tail” are considered to have a weaker compliance culture and should take immediate action to improve your Form ADV Quality score.
  • If your firm falls within the “left-tail”, statistically you run a greater chance of incurring a regulatory and/or litigation event.


For Accuracy, Form ADV Analyzer analyzes
  • 202 ADV fields for completion rates:
    • 144 mandatory fields 
    • 19 dependent mandatory fields
    • 39 fields for actual errors
  • Dependent mandatory completeness is determined by testing if you completed a field that is required based on your answer to a preceding question. 
  • Errors are determined by testing for mathematical inconsistencies and omissions.

For Consistency, Form ADV Analyzer examines:
  • Over 700 fields in the 18 sections (Schedule A & B are treated as one section) of your most recently filed ADV to determine whether you completed, or did not complete, a field within Form ADV consistently with the market universe.

For Frequency, Form ADV Analyzer calculates:
  • The number of times you filed your Form ADV during the prior two-year period and determines if you filed your Form ADV on time, and more or less frequently than the market.
  • Excessive filings may be driven by low Accuracy and Consistency scores.


Measuring and Managing your ADV Matters

The SEC, and more frequently investors, look for Advisers who have a demonstrated commitment to regulatory compliance.

The Form ADV Analyzer report, and any actions taken to improve the quality of your ADV filing process, is independent and verifiable prima facie evidence supporting your ongoing commitment to a strong compliance culture.

It should be shared with existing and new investors and used when marketing your funds as well as incorporated into your Compliance Policies and Procedures during “routine exams” that are conducted by the SEC.