Our “turn-key” investment adviser registration program for the Commonwealth of Pennsylvania includes:

• Setting up your firm’s account on the Investment Adviser Registration Depository (IARD) system
• Acting as liaison with the Pennsylvania Securities Commission
• Facilitating the payment of all Pennsylvania state registration fees
• Preparing and filing Form ADV Part 1 via the IARD system
• Preparing and filing Form ADV Part II via the IARD system
• Filing the Statement of Financial Condition with the Pennsylvania Securities Commission
• Filing the Computation of Net Worth with the Pennsylvania Securities Commission
• Drafting and filing investment advisory and/or financial planning agreements
• Drafting a compliance manual in conformity with the Pennsylvania Code
• Drafting of the privacy notice
• Filing Form U4 for investment adviser representatives

Important Additional Information for Pennsylvania Registrants:

Minimum Net Worth

An investment adviser that has its principal place of business in the Commonwealth of Pennsylvania and has custody of client funds or securities shall maintain at all times a minimum net worth of $35,000 unless the investment adviser meets any of the following:

1. The investment adviser has custody solely as a result of receiving fees directly deducted from clients’ funds or securities if the investment adviser:

• Possesses written authorization from the client to deduct advisory fees from an account held by a qualified custodian.

• Sends the qualified custodian written notice of the amount of the fee to be deducted from the client’s account.

• Sends the client a written invoice itemizing the fee, including any formulae used to calculate the fee, the time period covered by the fee and the amount of assets under management on which the fee was based.

2. The investment adviser has custody solely as a result of serving as a general partner, manager of a limited liability company or a person occupying a similar status or performing a similar function which gives the investment adviser or its supervised person legal ownership or access to client funds or securities if:

• The pooled investment vehicle is subject to audit at least annually and distributes its audited financial statements which have been prepared by an independent certified public accountant in accordance with generally accepted accounting principles to all limited partners, members or beneficial owners within 120 days of the end of its fiscal year.

• The investment adviser:

• Hires an independent party to review all fees, expenses and capital withdrawals from the accounts included in the pooled investment vehicle prior to forwarding them to the qualified custodian with the independent party’s approval for payment.

• Sends written invoices or receipts to the independent party which describe the amount of the fees (including any formulae used to calculate the fees, the time period covered by the fees and the amount of assets under management on which the fees were based), expenses or capital withdrawals for the independent party to verify that payment of the fees, expenses or capital withdrawals is in accordance with the documents governing the operation of the pooled investment vehicle and any statutory requirements applicable thereto.

• The investment adviser has custody solely as a result of acting as trustee for a beneficial trust in which the beneficial owners of the trust are a parent or step-parent; grandparent or step-grandparent; spouse, brother or step-brother, sister or step-sister; or grandchild or step-grandchild of the investment adviser.

An investment adviser that has its principal place of business in the Commonwealth of Pennsylvania and has discretionary authority over client funds or securities but does not have custody of client funds or securities shall maintain at all times a minimum net worth of $10,000. An investment adviser will not be deemed to be exercising discretion and subject to the requirements of this paragraph when it places trade orders with a broker-dealer under a third-party trading agreement if:

• The investment adviser has executed a separate investment adviser contract exclusively with its clients that acknowledges that a third-party agreement will be executed to allow the investment adviser to effect securities transactions for the client in the client’s broker-dealer account.

• The investment adviser contract specifically states that the client does not grant discretionary authority to the investment adviser and the investment adviser, in fact, does not exercise discretion with respect to the account.

• A third-party trading agreement is executed between the investment adviser, the client and the broker-dealer which specifically limits the investment adviser’s authority in the client’s broker-dealer account to the placement of trade orders and deduction of investment adviser fees.

An investment adviser that has its principal place of business in the Commonwealth of Pennsylvania and accepts prepayment of advisory fees of more than 6 months in advance and more than $1,200 per client shall maintain at all times a positive net worth.

The following applies when an investment adviser has its principal place of business in a state other than the Commonwealth of Pennsylvania:

• If the investment adviser currently is licensed as an investment adviser in the state in which it maintains its principal place of business and is in compliance with that state’s net worth requirements, the net worth required by this section shall be the same as the net worth requirement imposed by that state.
• If the investment adviser currently is not licensed as an investment adviser in the state in which it maintains its principal place of business, the net worth required by this section shall be the same as if the investment adviser had its principal place of business in the Commonwealth of Pennsylvania.

Surety Bonds

An investment adviser that has its principal place of business in the Commonwealth of Pennsylvania and does not meet the minimum net worth requirements may, by order of the Commission, have and maintain a surety bond in the amount of the net worth deficiency rounded up to the nearest $5,000.

An investment adviser that has its principal place of business in a state other than the Commonwealth of Pennsylvania shall comply with the above paragraph unless the investment adviser meets the following qualifications:

1. Is registered as an investment adviser in that state.
2. Is in compliance with the applicable net worth and bonding requirements of the state in which it maintains its principal place of business.

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Please call us toll free at 888-798-2930 for more information about our Pennsylvania “Turn-Key” Registration Program.