An article in this morning’s Ignites (subscription to Ignites required) announced that the SEC has proposed that registered investment advisors (RIAs) should disclose their ADV Part II online. The first part of the form, which discloses basic information about the advisor and firm, is available online and, frankly, has never struck us as terribly useful. The second part of the form, however, the ADV II, has the meat and according to regulations should be made available to clients upon asking for it.

The problem is, our experience has been that many advisors look at you with two heads when you ask for a copy of this form. It would appear that few of their clients actually do this and thus, the advisor - if they even know what we’re talking about - does not know how to produce the form. For example, in a recent project we did in which we opened nine managed fund accounts, only 1 advisor proactively provided us with the ADV II. With the others, we had to request the form and of those, three did not know what we were referring to.

While we tend to be skeptical of regulatory actions that seem to do nothing but justify the existence of a bureaucracy, putting the ADV II online strikes us a s good idea. After all, the form is already required and making it easily accessible will increase transparency and it should make the advisor’s job a bit easier since.