Form ADV Annual Update Checklist

Form ADV is the single most important regulatory filing for registered investment advisors. It's your firm's public face to regulators, prospective clients, and examiners. Yet the annual amendment — due within 90 days of your fiscal year end — is where most firms accumulate the inconsistencies that become examination findings two years later.

This checklist walks through every section that needs review, the specific inconsistencies SEC examiners look for between Part 1 and Part 2A, and how to file correctly through IARD. Use it as a working document each year to ensure nothing slips through.

1. When and Why

Every SEC-registered investment advisor must file an annual amendment to Form ADV within 90 days of the end of their fiscal year. For calendar-year firms, that deadline is March 31. State-registered advisors follow the same timeline but file through their state regulator.

What triggers the annual amendment

The annual amendment isn't optional even if nothing changed. You must review and either update or confirm every item in Parts 1, 2A, and 2B. The filing system requires you to actively certify the information is current.

Material changes trigger immediate amendments

Don't wait for the annual filing if something material changes mid-year. The following require a prompt amendment within 30 days:

• Change in ownership or control structure
• New disciplinary events
• Change to fee schedules affecting existing clients
• Adding or removing advisory services
• New conflicts of interest
• Change in custody arrangements

What happens if you miss it

A late filing is visible in IARD to anyone who checks — including examiners. It's one of the first things the SEC reviews when selecting firms for examination. Beyond the regulatory risk, your Form ADV is a public document. Prospective clients, consultants, and competing firms can see when your last update was filed. A stale ADV signals a compliance program that isn't keeping up.

2. Part 1 Review Checklist

Part 1 is the machine-readable filing that regulators use for oversight, risk scoring, and examination targeting. Errors here directly affect how the SEC perceives your firm.

• Item 5.C — AUM: Update regulatory assets under management. Use the same calculation methodology as prior year. Include both discretionary and non-discretionary.
• Item 5.D — Number of accounts: Update total account count by type (individuals, high net worth, pooled vehicles, pensions, etc.)
• Item 5.E — Advisory services: Confirm all checked services match what you actually provide. Uncheck anything you've discontinued.
• Item 5.F — Fee arrangements: Review compensation methods. Ensure percentages and ranges match your current fee schedules exactly.
• Item 5.I — Number of employees: Update headcount including any independent contractors performing advisory functions
• Item 7 — Financial industry affiliations: Add any new affiliations, remove terminated ones. This is a frequent exam finding.
• Item 9 — Custody: Confirm custody status. If you have authority to deduct fees from client accounts, you likely have custody.
• Item 11 — Disciplinary history: Disclose any new events for the firm or management persons. Review DRPs for accuracy.
• Item 12 — Small business: Confirm whether you still qualify as a small advisory business
• Schedule D — Direct owners and executive officers: Update any ownership changes, new officers, or departures

3. Part 2A Review Checklist

Part 2A is your firm brochure — the narrative document clients receive. It must be consistent with Part 1 while being written in plain English for clients to understand. This is where most inconsistencies develop.

• Item 4 — Advisory business: Update services description. If you added or removed services during the year, this section must reflect it.
• Item 5 — Fees and compensation: Verify every fee schedule, breakpoint, and billing method matches your current advisory agreements AND Part 1 Item 5.F
• Item 6 — Performance-based fees: If you charge them, confirm disclosure is current. If you don't, confirm this section says so.
• Item 8 — Methods of analysis and risk: Review for accuracy. If your investment approach has evolved, update it here.
• Item 10 — Other financial industry activities: Must match Part 1 Item 7 affiliations exactly
• Item 11 — Code of Ethics: Confirm your Code of Ethics description matches your actual written code
• Item 12 — Brokerage practices: Update soft dollar arrangements, best execution practices, and directed brokerage disclosure
• Item 14 — Client referrals: Disclose any referral fee arrangements. This is heavily scrutinized post-Marketing Rule.
• Item 15 — Custody: Must be consistent with Part 1 Item 9. If you have custody, describe the arrangement.
• Item 17 — Voting client securities: If you vote proxies, confirm your disclosure matches your actual proxy voting procedures
• Item 18 — Financial information: Disclose any financial conditions that could impair your ability to meet commitments

4. Part 2B Review

Part 2B brochure supplements cover each supervised person who provides advisory services and has direct client contact. These are the documents most likely to be outdated because they require per-person maintenance.

• Verify a current supplement exists for every supervised person providing advice to clients
• Update educational background and business experience for any changes
• Confirm disciplinary history is current (or confirm none exists)
• Review other business activities — if an advisor started a side business, it needs disclosure
• Update compensation structure if it changed (salary, bonus, revenue sharing, etc.)
• Confirm supervision description is accurate — who supervises this person and how?
• Remove supplements for departed employees; add supplements for new advisory personnel

5. Common Inconsistencies Examiners Find

The SEC doesn't just read your ADV — they cross-reference Part 1 against Part 2A, and both against your actual business practices. These are the specific inconsistencies that generate deficiency findings:

Fees

• Part 1 says max fee is 1.0%, Part 2A says "up to 1.5%" — the most common inconsistency. Pick one and make them match.
• Part 2A describes a fee schedule that doesn't include the actual fees some clients pay — legacy accounts on old schedules still need disclosure.
• Negotiated fees below published minimums not disclosed — if you negotiate, say so in Part 2A.

Custody

• Part 1 Item 9 checks "no" for custody, but your firm deducts advisory fees directly — fee deduction authority is custody.
• Part 2A doesn't mention standing letters of authorization (SLOAs) — the SEC treats these as custody in many cases.

Client types

• Part 1 Item 5.D reports certain client types, but Part 2A doesn't describe services to those clients — if you report pension fund clients in Part 1, Part 2A should address how you serve them.

Services and affiliations

• Part 1 Item 7 lists an affiliation that Part 2A doesn't disclose as a conflict — every affiliation is a potential conflict requiring narrative disclosure.
• Part 2A describes services no longer offered — remove services you've discontinued.

6. Filing Process

IARD filing steps

• Log into IARD (Investment Adviser Registration Depository) at iard.com
• Select "File Annual Updating Amendment" — do not file as an other-than-annual amendment
• Work through each Part 1 section. The system will flag required fields that are blank.
• Upload your updated Part 2A brochure as a PDF attachment
• Upload all Part 2B supplements as separate PDF attachments
• Review the filing summary for completeness before submitting
• Electronically sign and submit. You'll receive a confirmation receipt.

State notice filings

If you're SEC-registered but have clients in states that require notice filings, IARD handles state notices automatically when you file your annual amendment. However, verify that your state notice filing list is current — if you took on clients in new states during the year, you may need to add states before filing.

Client delivery requirements

Within 120 days of your fiscal year end, you must either:

• Deliver the full updated brochure to every existing client, OR
• Deliver a summary of material changes (if you maintain one) with an offer to provide the full brochure

Document the delivery. Keep a log showing which clients received the brochure, when, and by what method. Examiners will ask for this evidence.

Frequently Asked Questions

When is the Form ADV annual amendment due?

The Form ADV annual amendment is due within 90 days of the end of your fiscal year. For most RIAs on a calendar fiscal year, this means March 31. Missing this deadline can trigger SEC enforcement action and is a common examination finding.

What triggers an other-than-annual amendment to Form ADV?

Material changes to your brochure (Part 2A) require a prompt amendment filed within 30 days. Examples include changes to fee schedules, new disciplinary events, changes in ownership or control, new conflicts of interest, or significant changes to your advisory business such as adding new services or changing your investment strategy.

Do I need to deliver the updated brochure to existing clients?

Yes. Within 120 days of your fiscal year end, you must either deliver the updated brochure or a summary of material changes to all existing clients. You can deliver it electronically if clients have consented to electronic delivery. New clients must receive the brochure at or before entering into an advisory agreement.

What is the most common Form ADV inconsistency SEC examiners find?

The most common inconsistency is between Part 1 (fee schedule ranges reported to regulators) and Part 2A (fee disclosures to clients). For example, Part 1 might report a maximum fee of 1.5% while Part 2A describes fees up to 2.0%, or Part 1 reports custody while Part 2A doesn't disclose the custodial arrangement.

What happens if I miss the Form ADV annual amendment deadline?

Missing the deadline places your firm in regulatory non-compliance. The SEC can impose fines, issue deficiency letters, or in extreme cases, revoke registration. State regulators may also flag late filers. Additionally, late filing is noted in your IARD record and is often one of the first things examiners check during an SEC examination.