

Investment advisers with a 31 December fiscal year-end are in the midst of updating their Form ADV, with a deadline set for 31 March 2025.
Ensuring a smooth filing process requires careful preparation, ACA Group recently offered a guide for firms in the process of preparing their Form ADV 2025 update.
One of the most crucial steps is ensuring that the IARD (Investment Adviser Registration Depository) account is funded well before the deadline. The SEC does not accept Form ADV filings for accounts without sufficient funds, and high system traffic near the deadline could lead to delays. Advisers should deposit funds at least a week in advance to avoid potential submission issues. Fee structures depend on an adviser’s regulatory assets under management (RAUM), with costs ranging from $40 to $225 for different registration categories.
Another key aspect is state notice filings. The Form ADV annual update provides an opportunity to assess whether new client relationships trigger additional state-level filing requirements. It is critical to update IARD accounts to reflect the necessary state filing fees, rather than waiting for the next annual state filing renewal. The IARD website provides guidance on state filing obligations.
Ensuring consistency across Form ADV sections is essential. Advisers must cross-check Parts 1A, 2A, 2B, and 3 (Form CRS) to confirm that information about services, fees, conflicts of interest, and disciplinary history is up to date. Any outdated disclosures—such as references to COVID-19 risks that no longer apply—should be removed.
The SEC routinely examines advisers’ Form ADV documentation during regulatory audits. To ensure compliance, advisers should generate reports validating key data, including client numbers, asset classifications, and RAUM calculations. Firms should also document the criteria used to classify clients and describe the methodologies applied to filter or interpret financial data.
Material changes must be reported, even if other-than-annual amendments have already been submitted. Item 2 of Form ADV Part 2A should contain a summary of all material changes since the last annual update.
As part of its guide, ACA also highlighted current SEC focus areas.
The SEC has highlighted several focus areas for 2025, particularly in relation to marketing, artificial intelligence (AI), outsourcing risks, and conflicts of interest. The 2024 Risk Alert on Marketing Rule compliance identified frequent errors in Form ADV disclosures. These include failures to accurately state the presence of third-party ratings, performance results, or hypothetical performance claims in adviser marketing materials.
Firms that utilise AI-driven investment tools must carefully assess the materiality of AI-related risks. The SEC has raised concerns that AI could be used to promote investments that benefit firms over clients, encourage frequent trading, or steer clients towards complex financial products that do not align with their risk profiles.
Digital engagement practices, including online advisory services and automated recommendations, have also come under SEC scrutiny.
The SEC’s 2025 Priorities report also identifies risks related to outsourcing, particularly when third-party service providers play a critical role in compliance functions. Advisers should ensure that vendors meet competency, cybersecurity, and regulatory standards.
Some of the other areas the guide delves into include conflicts relating to assets, non-standard fee arrangements, dual capacity advisers, advisers to private funds, cybersecurity and more.
Read the full guide here.
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