you're a registered investment adviser, you're likely to need about 10.6 hours to complete the newly-revised 26-page Form ADV Part 2.  The SEC came up with that number, as the "estimated average burden hours per response."   Good luck!

A recent survey conducted by RegEd, a compliance consulting and technology solutions provider, found 45% of IA's say they aren’t prepared for compliance with the revised forms.  Furthermore, 40% of respondents said that while they know what Form ADV Part 2 is, they aren’t aware of all the details associated with the new requirements.

A new Fidelity poll of more than 200 advisors, found that nearly 30% of respondents say they're not very confident in their preparedness to fulfill the new ADV Part II requirements.  And, 89% of respondents indicate that the new ADV Part II requirements will increase their workload somewhat to significantly.

    What's Required.   Starting next year, advisors are required to draft a new, more narrative brochure that describes their business practices, conflicts of interest and a background of their advisory personnel.  They also are required to post the form to their website and update it at least annually. 

States are now converting over to the Part 2A form, and "no state is rejecting the format," said Stephen Galletto, an attorney with Stark & Stark.  He and fellow partner, Thomas Giachetti, are two of the law experts tapped to help Fidelity with its webinars and workshops.  Galletto also advises RIAs that: 

• With information required on the new Form ADV, customers in any state can see disciplinary action taken against an RIA, no matter what state the firm or representative is located in.
• Customers also can perform an Investment Adviser Search on the SEC’s website .
• Deadline dates vary, but they're coming soon.
• For new filings, Parts 2A and 2B of the ADV Form must be uploaded electronically as of 1/1/11, for RIA individuals or firms seeking to be SEC-registered.  For existing SEC-registered investment advisor firms, the deadline is 90 days from the firm’s fiscal year-end - for fiscal years ending 12/30/10, the adviser would have a “hot date” of 3/31/11.

    Fidelity Offers Guidance.   Fidelity Investments is scheduling a series of webinars and regional workshops in 2011 to help its RIA clients who are worried about complying with the SEC's latest regulatory changes.  According to AdvisorOne.com, RIAs are attending Fidelity’s courses in record numbers to receive assistance from 3rd-party experts such as lawyers and compliance consultants on such regulatory puzzles as how to answer Form ADV Part 2 and cost-basis reporting changes. 

What we’re finding with ADV Part 2, is that "most clients are going to have to spend a significant amount of time in the first quarter to undergo the transition from what they were used to with ADV Part 2 to the new format, which is a narrative brochure.  Whenever you leave things open to interpretation, that creates uncertainty, especially when you’re dealing with a regulatory filing."  -- Fidelity EVP David Canter.

“The whole year of 2011 appears to have looming regulatory changes for advisors."

For further details, click onto:   [AdvisorOne, 12/20, "SEC’s New Form ADV Requirements ..."]