An Investment Adviser's fiscal year ends December 31. They must deliver their client brochure summary by April 30 and file their annual registration update with the state administrator by March 31. True or False?
True. If you hesitated or mixed up those dates, you’ve found the most common point-killer on the Series 65 ethics section. The exam doesn't just test if you know a deadline; it tests if you know the right deadline for the right document, and the difference is what separates a pass from a fail.
An Investment Adviser must file its Form ADV Part 1 annual update with regulators within 90 days of its fiscal year-end. Separately, it must deliver its Form ADV Part 2 client brochure (or a summary of material changes) to existing clients within 120 days of its fiscal year-end.
Key facts
- Form ADV Part 1 Annual Update
- Filed with regulators within 90 days of fiscal year-end.
- Form ADV Part 2 Annual Delivery
- Delivered to clients within 120 days of fiscal year-end.
- SEC Registration Threshold
- Generally required for IAs with $110 million or more in Assets Under Management (AUM).
- State Registration Threshold
- Generally for IAs with under $100 million in AUM.
- Governing Authority
- Investment Advisers Act of 1940 and state-level Uniform Securities Acts.
- Filing System
- Investment Adviser Registration Depository (IARD).
What is Form ADV and Why Does It Matter on the Exam?
Form ADV is the uniform registration document for Investment Advisers (IAs). The Series 65 exam focuses heavily on it because it is the primary tool for client disclosure and regulatory oversight, embodying the core principles of the Uniform Securities Act. You must know its structure and deadlines cold.
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Form ADV Part 1: The Regulatory Filing
Part 1 is a data-driven, check-the-box form filed electronically through the IARD system. It contains objective facts about the adviser: its ownership structure, business practices, AUM, client types, and any disciplinary history of the firm or its employees. This information is public and used by regulators to monitor the industry.
Form ADV Part 2: The Client Brochure
Part 2 is a narrative brochure written in plain English, designed for clients. It details the firm's services, fee schedule, investment strategies, risk factors, and conflicts of interest. It's the primary disclosure document a client receives.
The exam often tests the distinction between Part 2A and Part 2B:
- Part 2A (The Brochure): This is about the advisory firm itself.
- Part 2B (The Brochure Supplement): This provides information about the specific individuals at the firm who provide advice, including their educational background, business experience, and disciplinary history. A supplement must be provided for any supervised person who formulates investment advice and has direct client contact, or who has discretionary authority over client assets.
What Are the Form ADV Part 1 Filing Deadlines?
The deadlines for filing Form ADV Part 1 with regulators (either the SEC or state administrators) are rigid and frequently tested.
Initial Filing
An IA must file its initial Form ADV before it can begin operating as an adviser. Registration becomes effective within 45 days for SEC-registered advisers or within 30 days for most state-registered advisers, unless the administrator issues a denial.
The 90-Day Annual Updating Amendment
Every registered IA must file an annual updating amendment to its Form ADV Part 1.
This update must be filed within 90 days of the firm's fiscal year-end. Its purpose is to ensure the regulator has current information and to re-verify the IA's eligibility for registration based on its AUM.
Prompt Other-Than-Annual Amendments
If a material change occurs during the year, the IA cannot wait for the annual update. It must file an "other-than-annual" amendment promptly. While the rule doesn't define a specific number of days, the industry standard (and a safe assumption for the exam) is within 30 days for most material changes.
What is the Form ADV Part 2 "Brochure Rule" Delivery Timeline?
The Brochure Rule (SEC Rule 204-3) governs when and how an IA must deliver its Form ADV Part 2 to clients. The deadlines here are distinct from the Part 1 filing deadlines.
Initial Delivery to New Clients
An IA must deliver its current Form ADV Part 2A (brochure) and any relevant 2B supplements to a prospective client before or at the time of entering into an advisory contract. This ensures the client has full disclosure before making a commitment.
The 120-Day Annual Delivery Requirement
For existing clients, the IA has an annual obligation. Within 120 days of the firm's fiscal year-end, the IA must deliver one of the following:
- A copy of the current, updated Form ADV Part 2 brochure.
- A summary of material changes made to the brochure since the last update, along with an offer to provide the full brochure upon request.
Exemptions from the Brochure Rule
The exam may test situations where brochure delivery is not required. Key exemptions include:
- Contracts with registered investment companies.
- Contracts for impersonal advisory services (e.g., a general newsletter) for which the client pays less than $500 per year.
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How Do AUM Thresholds Affect SEC vs. State Registration?
An IA's Assets Under Management (AUM) determines whether it registers with the SEC (a federal adviser) or with state securities administrators.
State-Registered IAs and the De Minimis Exemption
IAs with under $100 million in AUM typically register with the state(s) in which they operate. A crucial concept here is the de minimis exemption. An IA does not have to register in a state if:
- It has no place of business in that state, AND
- It has five or fewer retail clients in that state during any 12-month period.
This exemption prevents IAs from having to register in every single state where they might have a handful of clients.
SEC-Registered IAs and Notice Filing
IAs with $110 million or more in AUM are generally required to register with the SEC. Once SEC-registered, they are exempt from state registration. However, they must notice file in any state where they have a place of business or a certain number of clients. Notice filing involves sending the state a copy of their SEC filings and paying a fee, but it is not the same as full registration.
A mid-sized adviser (with AUM between $25 million and $100 million) may also register with the SEC if it would otherwise be required to register in 15 or more states. This rule prevents a burdensome multi-state registration process.
Switching Registration: The AUM Grace Periods
The exam tests the rules for transitioning between state and SEC registration based on AUM, which is measured at the firm's fiscal year-end.
- State to SEC: If a state-registered IA's AUM exceeds $110 million at its fiscal year-end, it must file for SEC registration within 90 days.
- SEC to State: If an SEC-registered IA's AUM falls below $90 million at its fiscal year-end, it must withdraw its SEC registration and register with the appropriate states within 180 days.
Meet "Aspen Grove Wealth," an IA in Colorado with a December 31 fiscal year-end.
- AUM on Dec 31, 2025: $98 million (State-registered).
- AUM on Dec 31, 2026: $112 million (Crosses the SEC threshold).
Step 1: 2026 Obligations as a State-Registered IA
Based on its year-end 2025 AUM, Aspen Grove operates as a state-registered IA throughout 2026.- Form ADV Part 1 Annual Update: Due to the Colorado regulator within 90 days of Dec 31, 2025. Deadline: March 31, 2026.
- Form ADV Part 2 Annual Delivery: Due to all existing clients within 120 days of Dec 31, 2025. Deadline: April 30, 2026.
Step 2: Crossing the SEC Threshold
At its next fiscal year-end (Dec 31, 2026), Aspen Grove's AUM is $112 million. This triggers the requirement to switch to SEC registration.- Action: Aspen Grove must file an initial Form ADV with the SEC.
- Deadline: Within 90 days of Dec 31, 2026. Deadline: March 31, 2027.
Once its SEC registration is effective, Aspen Grove will withdraw its Colorado registration and begin notice filing in Colorado instead.
Step 3: A New Client in 2027
On May 15, 2027, now as an SEC-registered IA, Aspen Grove signs a contract with a new client.- Action: Deliver the current Form ADV Part 2A and 2B to the new client.
- Deadline: On or before May 15, 2027.
This example shows how the fiscal year-end AUM is the key trigger for registration changes and their corresponding deadlines.
Comparison: Form ADV Part 1 vs. Part 2 Deadlines
| Feature | Form ADV Part 1 (Filing with Regulator) | Form ADV Part 2 (Client Brochure) |
|---|---|---|
| Purpose | Regulatory registration and public data record. | Client disclosure of services, fees, and conflicts. |
| Audience | SEC or State Securities Administrator. | Prospective and existing advisory clients. |
| Annual Deadline | Within 90 days of fiscal year-end. | Within 120 days of fiscal year-end. |
| Trigger | The passage of the fiscal year. | The passage of the fiscal year. |
| Action | File an "annual updating amendment" via IARD. | Deliver the brochure or a summary of changes. |
| Other Updates | "Promptly" for any material changes. | Required for material changes; delivered annually. |
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