Investment Advisors – Time To Remove PPP Loan Disclosures From Form ADV

Some of our most well-received posts over the last two years have been those where we discuss PPP Loans, and when or how to disclose them. As part of the pandemic, many advisors chose to participate in the PPP program to ensure that there would be no interruptions to their ability to serve their clients. 

At this stage of the game, most firms have either repaid their PPP loans or they’ve been forgiven.  If you participated in the program, we’ve historically recommended that you disclose this in Form ADV Part 2A.  If your PPP loan has either been repaid or forgiven, don’t forget to make sure that your ADV Part 2A reflects that. 

The important thing to remember is that the SEC has plainly stated that your fiduciary duty to clients is to give them sufficient information about you and your business, so that they are able to make an informed decision about hiring you.  Whether the topic is business model, personnel, investment methodology, or even PPP loan status, we strongly urge you to be thorough and transparent in your marketing, disclosures, and your ADV Part 2A brochure.  As we’ve said before, we have seen the Commission question and object to practices at firms that would have otherwise been fine if they had been sufficiently disclosed.

Our consultants understand the nuances in word choice, reporting style and information to include for the ADV. We take the time to get input from you to ensure your disclosures are accurate, do not omit material facts and are reported correctly. Leverage our experience and resources to ensure your Form ADV meets the regulatory requirements and that the process receives the time this regulatory environment demands.

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About The Author

Lance Whittemore has designed, implemented and maintained compliance programs for SEC- and State-registered investment advisors, and has served as CCO for several of them. He has also worked in multiple engagements of varying scope with Registered Investment Advisors, broker-dealers and clearing firms, performing examinations, audits, and remediations of various aspects of their control and supervisory programs.

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