Preparing your annual Form ADV amendment: the operations work to start in January
A small RIA's annual Form ADV updating amendment is due within 90 days of fiscal year end for SEC-registered advisers, with states setting similar deadlines. The operations work is gathering the year-end facts the form asks for, such as assets under management, account and client counts, discretionary status and fee arrangements, and checking that the brochure still describes how the firm actually works. Start in January, keep the source of every number, and plan the client delivery of the updated brochure or summary of material changes.
The Form ADV amendment tends to arrive as a March scramble: someone realizes it's due, the account count has to be rebuilt from a custodian export, and nobody is sure whether the fee description in the brochure still matches what clients pay. Most of that is avoidable if the operations side starts in January.
What facts does the operations side usually gather?
| Item | Typical source |
|---|---|
| Regulatory assets under management, discretionary and non-discretionary | Custodian year-end values, adjusted to the form's definition |
| Number of accounts, discretionary and non-discretionary | Your account list with each account's status |
| Number and types of clients | Your client and household records |
| Fee arrangements in use | Your billing setup and advisory agreements |
| Employees and investment adviser representatives | Your staff list |
| Custodians used | Your custodian relationships |
What should you check in the brochure?
- Does the fee description match the fee schedule you actually bill?
- Do the services and investment strategies described match your current models?
- Has anything changed in how you handle billing, custody or trading?
- Are the people named still the right people?
A simple timeline
- Early January: pull year-end custodian data and save the files.
- Mid January: count accounts and clients by status; reconcile to the account list.
- Late January: review the brochure against how you work; list changes.
- February: send the facts and the list of changes to whoever files.
- By the deadline: filing done; then plan the client delivery and log it.
A worked example
Take a hypothetical two-person RIA with a December year end. In the first week of January the operations lead saves the custodian's year-end files. She counts 142 accounts: 131 discretionary, 11 non-discretionary, matching the account list after fixing two statuses that had changed during the year. The brochure review finds one change: the firm moved to billing in arrears in the summer. That goes to the compliance consultant with the figures in early February, and the summary of material changes is delivered and logged in March.
What are the common gaps?
- Account counts that don't match because statuses weren't updated during the year.
- No saved working for the AUM figure.
- A brochure fee description that lags a fee change.
- Delivery of the updated brochure not recorded.
When is this overkill?
If nothing changed during the year and your records are current, this is a short afternoon. The timeline is there for the years when something did change.
How Advorra fits
Advorra keeps each account's discretionary status, client and household records, billing setup and a brochure-delivery log together, so the counts and the delivery record come from the same place you work every day. Account values come from your custodian's files. See the product page, or read the compliance calendar and brochure delivery records.
One thing to do this week: put "save year-end custodian files" in your calendar for the first week of January.
An operations checklist, not legal or compliance advice. Sources: Rule 204-1, Rule 204-3. Your compliance consultant advises on what to report.
Questions advisors ask
When is the annual amendment due?
For SEC-registered advisers, within 90 days after the end of the fiscal year under Rule 204-1. State-registered advisers should check their state's deadline; many follow a similar timeline through IARD.
Who files it?
The firm files it, often with help from its compliance consultant. This guide covers the operations data, not the filing itself.
What happens with the brochure afterwards?
If there were material changes, SEC-registered advisers generally deliver the updated brochure or a summary of material changes to clients within 120 days of fiscal year end.
Where do the AUM figures come from?
Usually custodian data as of year end, adjusted for the form's definition of regulatory assets under management. Keep the working.
Is this compliance advice?
No. It is an operations checklist. Your compliance consultant advises on what to report.
See it on a demo firm
Advorra is practice software for independent RIAs: clients, models, IPS, billing and compliance records in one place, on top of the custodian you already use. Built by The CollabHub.
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