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A "notice filing" is a document providing information to the Securities and Exchange Commission (SEC) about an investment advisor. People who want to offer investment services need to register with the SEC and meet certain standards in order to practice. In addition, individual states may require copies of these documents so they can verify the authenticity of investment advisors in their regions. This form must be regularly updated and is available to clients.
The SEC requires use of the ADV Form for notice filings. This includes two components. Section one provides general information about the advisor and business, including location, records of disciplinary actions, and experience. Current contact information should also be made available. A series of boxes are provided for advisors to use when filling out the form to ensure that they include all the necessary information.
In the second part of the notice filing form, advisors need to provide brochures about the services they offer, their fee schedules, and other business information. These documents are written in plain language so they can be readily understood by investors. SEC regulators review them to determine if the disclosures are adequate, and to make sure an investment advisor is observing professional ethics in the provision of information to clients.
Clients can ask to see a notice filing before they enter a contract with an investment advisor. This form can provide information about the person’s qualifications, experience, and services to help a client decide if the advisor is suitable. The form should be current, indicating that the investment advisor is keeping up on registration requirements. In the event of changes, advisors notify their clients as well as updating the notice filing to keep the SEC apprised of the situation. Transitions can occur as people change companies, start new firms, or sell their companies, and these must be documented.
Regulation of investment advisors is designed to protect members of the general public. By requiring a notice filing, the SEC and individual states can monitor who is working as an investment advisor, what kinds of services are offered, and whether people are qualified for the work. In the event of complaints and disputes, this documentation can become important. Clients can file complaints directly with the SEC if they believe information is falsified or if they have disputes with their advisors that cannot be resolved by other means. Disciplinary action may be considered if regulations or legal ethics were disregarded.