In order for a Swiss wealth manager or family office to do business with US clients living in the US or abroad, they are required to register with the SEC. The registration enables the Swiss SEC RIA to communicate freely with American clients, travel to the US on business without restrictions and promote their wealth management services on US soil.
Investment advisers generally are regulated by the SEC or state securities authorities. The SEC typically regulates investment advisers (RIAs) that have assets under management in excess of USD 100,000,000. Investment advisers that do not meet this threshold generally are regulated by the states. The SEC registers investment adviser firms but does not separately register individual representatives of investment adviser firms. The states register investment adviser firms, and many separately register individual investment adviser representatives.
Both the SEC and the states may require certain investment advisers to hedge funds, venture capital funds, and other private funds that are not required to be registered (Exempt Reporting Advisers) to instead file reports with them. SEC Registration Form ADV has two parts.
TAKE A CLOSE LOOK AT FORM ADV PART 1, PART 2, AND PART 3
Part 1 contains information about the adviser's business and whether the adviser has had problems with regulators or clients.
Part 2 sets out the minimum requirements for a written disclosure statement, commonly referred to as the “brochure,” which advisers must provide to prospective clients initially and to existing clients annually.
The brochure describes, in a narrative format, the adviser’s business practices, fees, conflicts of interest, and disciplinary information. Before you hire an investment adviser, always ask for and carefully read all parts of the Form ADV.
Part 3 - Form CRS
Every firm that offers services to a retail investor must file a relationship summary with the SEC and deliver it to each retail investor. A retail investor is a natural person, or the legal representative of such natural person, who seeks to receive or receives services primarily for personal, family or household purposes.
The relationship summary is designed to assist retail investors with the process of deciding whether to (i) establish an investment advisory or brokerage relationship, (ii) engage a particular firm or financial professional, or (iii) terminate or switch a relationship or specific service.
On June 5, 2019, the SEC adopted Form CRS and new rules, as well as amendments to its forms and rules, under both the Investment Advisers Act of 1940 (“Advisers Act”) and the Securities Exchange Act of 1934 (“Exchange Act”).
