In order for a Swiss wealth manager or family office to provide their services to US clients (US Persons) living in the US or abroad, they are required to register with the Securities and Exchange Commission in the US as an investment advisor (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 advisors generally are regulated by the SEC or state securities authorities. The SEC typically regulates investment advisors (RIAs) that have assets under management in excess of USD 100,000,000. Investment advisors that do not meet this threshold generally are regulated by the states. The SEC registers investment advisor firms but does not separately register individual representatives of investment advisor firms. The states register investment advisor firms, and many separately register individual investment advisor representatives.
Both the SEC and the states may require certain investment advisors to hedge funds, venture capital funds, and other private funds that are not required to be registered (Exempt Reporting Advisors) to instead file reports with them. SEC Registration Form ADV has two parts.
There is no specific level of skill or training required to become “registered” and the information in the brochures has not been approved or verified by the SEC, any state securities authority, or any other governmental body.
TAKE A CLOSE LOOK AT FORM ADV PART 1, PART 2, AND PART 3
Part 1 contains information about the advisor's business and whether the advisor 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 advisors must provide to prospective clients initially and to existing clients annually.
The brochure describes, in a narrative format, the advisor’s business practices, fees, conflicts of interest, and disciplinary information. Before you hire an investment advisor, 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 Advisors Act of 1940 (“Advisors Act”) and the Securities Exchange Act of 1934 (“Exchange Act”).
