Investment Adviser Formation and Registration

Parker MacIntyre is adept at assisting advisers at the start-up phase, or shortly thereafter, when registration at either the state or federal level becomes necessary. Adviser registration obligations are split between federal and state jurisdiction based on advisory assets managed—advisers with more than $100 million in AUM register with the SEC unless an exemption applies, while those with AUM of less than $100 million generally register with the states. In either event, registration entails the online completion of an application on Form ADV, which elicits extensive information about the advisory firm and its principals. Filing of a Form ADV also involves creation of a substantive disclosure document known as a Part 2 brochure which is uploaded along with the online filing. Accuracy and thoroughness to exacting standards expected by regulators are key to successfully filing these documents. We will assist advisers in completing and submitting these forms, creating a compliant Part 2 brochure, and will generally shepherd advisers through the entire process, interacting with regulator personnel along the way as necessary.

For entrepreneurial advisers just entering the business, we will also provide start up counsel, assisting the firm principals with proper entity selection (such as deciding between forming as a corporation, limited liability company, or partnership), entity formation, and the drafting of operating agreements or other constitutional documents. Indeed, as more fully described in our firm’s General Corporate Law practice area description, Parker MacIntyre provides a host of legal services to start-up businesses of all types.

Additionally, we have assisted numerous seasoned individual investment advisory representatives—some with client AUM in the tens of millions of dollars—move their considerable books of business out of a large corporate investment adviser, and into a newly-established self-owned advisory firm. In such a scenario, a compliance infrastructure must be quickly put into place in order to accommodate a significant existing client base on day one. Such a process not only involves filing the new firm’s Form ADV and Part 2 brochure with the relevant regulator, but also entails interacting with custodians and the former advisory firm in an effort to seamlessly move potentially hundreds of clients from the old firm to the newly-created adviser.

Finally, Parker MacIntyre attorneys, who are especially skilled at advising on applicable registration exemptions, will be best able to counsel you as to whether your firm may be able to avoid SEC or state (or both) registration entirely. Our attorneys are intimately familiar with the nuances of the federal Advisers Act as well as the various state advisory law analogs. For example, federal law provides exemptions, under certain conditions, to private fund advisers, venture capital advisers, and other specific advisers. And, most states provide de minimis exemptions to advisers having no more than a specified number of clients. However, applicability of these various exemptions is rarely straightforward; instead, they often turn on the adviser’s mix of clients, the location of these clients, and the jurisdiction’s definition of the term “client” itself. In this light, Parker MacIntyre will carefully assess not only the relevant law at issue, but your firm’s specific business activities as well. We fully understand the costs and time commitment involved in becoming registered as an investment adviser—and how these obligations can detract from an adviser’s core mission of managing money for clients. Accordingly, you can rest assured that, to the extent that a viable exemption exists, we will find it for you.