An investment advisor's ADV Part II "Brochure" has always been something of a waste of time. Advisors spend time preparing it to give to investors, and investors undoubtedly never read the document, which is long, detailed and quite honestly, boring.
Years ago the SEC considered requiring advisors to put their brochures online, and apparently now they are moving forward with that plan. We will have to see what the actual rule is, but an HTML document, with a table of contents that links to the detail sections of the brochure, might actually get investors to read parts of the documents, and should help advisors distinguish themselves from other advisors.
It will be interesting to see how this plays out. A huge number of SEC registered advisors are hedge fund managers - because of the debacle over registration. The hedge funds are prohibited by regulation from advertising, and therefore do not have web sites. Now the SEC is going to require their advisors to put the brochure online, presumably accessible to the world.
So, this online brochure, for the hedge fund manager with one client (his hedge fund) who never de-registered, is going to put online information about this fees, his investment strategy, and related information, all of which will relate to his fund, and all of which may be considered advertising.
We will have to wait and see the proposed rule to figure all of this out, but sometimes not using the Internet is the best course of action. Just because we can, doesn't mean we should.
The original article is at the WSJ - SEC Dusts Off Online Plan For Brochures of Advisers - WSJ.com (Sub Required)
