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Deciphering Form ADV Filings

One thing that’s great about our profession is that we get to learn a little bit about a lot of things. Sometimes, though, the learning is more of a slog than we’d like. This week HBG Senior Consultant Heather Hoke forges a path for us through the dense mire of SEC Form ADVs, so that we can get better information about financial advisors and the companies they work for. Thanks, Heather! ~Helen

Heather Hoke

        Heather Hoke

There is so much wealth among people in the finance industry. If you are researching someone who is a founder, partner, or executive officer of an advisory firm, including private equity and hedge funds, be sure to look at the SEC Form ADV. It provides an abundance of information about registered investment advisory firms and their affiliated professionals.

I remember when I first started looking at Form ADVs and I felt completely overwhelmed! There were so many pages of information, sometimes hundreds of pages. Well, that was many years ago and I am now much more adept at finding the information that I need quickly. I thought I would share some tips with you to save you some time…

The Securities and Exchange Commission (SEC) requires all professional investment advisers to submit the Uniform Application for Investment Adviser Registration (or more commonly known as the Form ADV). For companies that manage funds in excess of $25 million, this form must be updated annually and whenever material changes occur.

Where to find a Form ADV

Form ADVs are publicly available through the SEC’s Investment Advisor Public Disclosure website. There you can search either by advisory firm name or by the name of the individual investment advisor.

For our work, the two most important things to look at are “View Form ADV By Section” and “Part 2 Brochures.”

Choose “View Form ADV By Section” so that it is broken down into sections to view rather than the full, often very lengthy, document.

Sections not to miss

 Part 1A Item 1 Identifying Information includes the name, address and phone number of the investment advisor.

Item 2 SEC Registration/Reporting specifies if the firm is considered a large or mid-sized advisory firm.

Item 5 Information About Your Advisory Business provides number of employees (in sections A and B), number and types of clients (in sections C and D), fee arrangements (in section E), assets under management (AUM) (in sections D and F), and advisory activities (in section G).

Schedule A includes direct owners of the registered investment advisor with a 5% or more ownership interest and executive officers (CEO, chief financial officer, chief operating officer, chief legal officer, chief compliance officer, directors).

Schedule B includes all of the indirect owners.

It is necessary to check both Schedule A and Schedule B to fully understand the ownership structure and ranges. Ownership codes specify a range of ownership interest which can be helpful in considering the capacity of an individual.

Schedule D includes other office locations and affiliated registered investment advisors and broker/dealers.

Disciplinary Reporting Page (DRP) provides details about felony or investment-related misdemeanor, regulatory discipline, or court judgments related to violation of investment-related statutes and regulations by the investment advisor or its affiliated persons.

Signature Page for the date of the document.

Next choose “Part 2 Brochures.” At the bottom of the page, you will find a PDF of the brochure which is a narrative of the advisory firm. Each firm lays out their brochure slightly differently, but there is a table of contents to help you find relevant sections. The document can include:

  • An overview of the registered investment advisor
  • Advisory fees
  • Types of clients
  • Background information on advisors
  • Disciplinary information of any legal or disciplinary events

Now you’re a pro at deciphering the SEC Form ADV!

The information in the ADV can be incredibly helpful when researching people in the finance industry or an advisory firm as it can provide indications of significant wealth for individuals and be useful in your due diligence research.

 

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Unexpected life lessons from the NEDRA conference

Heather Hoke

Senior Consultant Heather Hoke

This week I’m delighted to share an insightful article by HBG Senior Consultant Heather Hoke. As is our custom, the whole team gathered at the NEDRA conference this year. NEDRA is always a bit like a family reunion, but this year was even more special for all of us. Heather shares a slice of that wonderful two days and some of the insights and reminders the experience gave her. ~Helen

I recently returned from the NEDRA conference in Springfield, MA. My drive home gave me some time to reflect on the differences that I saw at the conference this year versus the one I attended pre-pandemic in 2019.

At the conference, I was happy to find that it felt like it was back to near normal. I saw smiling faces not hidden by masks, no one backed away from hugs or sitting close. I gave countless hugs during the conference, the most I have in years. Some people wore masks indoors which I think is now just a part of our lives for the long term. I was thrilled that we were back to a place more like pre-pandemic for this event. This felt amazing considering all that we have gone through since Spring 2020.

It was 1,153 days that we were in a COVID-19 Public Health Emergency! The health emergency was renewed 13 times since the declaration was first issued  on March 13, 2020. It expired on May 11, 2023. Shouldn’t we have celebrated on May 11?! I mean come on…. We all went through a shutdown and our lives changed forever. After the shutdown in 2020, the roads were deserted, rainbows went up in windows, everyone was out walking in the neighborhood but on opposite sides of the street, toilet tissue was impossible to find, face to face time with people outside of our bubble ceased, we were wiping down our delivered groceries for Pete’s sake!! Where were the fireworks and the parades to celebrate on May 11?

May 11 was just another day, like any other. It did not feel much different. Well, it did a bit as I was climbing out of the work pile that happens after you travel for a conference.

As I sat down to write this blog, I intended to write about the quality and value of the NEDRA conference. As always, NEDRA put on a fantastic event, and I learned a lot from the sessions. I was excited to learn more about art, planned giving, physician compensation, and unlisted billionaires. But upon taking the time to really think about my conference experience it unexpectedly became about something else…the human connection and coming out the other side of a pandemic.

One thing that was not “normal” this year was the number of development researchers that I spoke with who are now working from home. I was thrilled to hear this! I have been fortunate to work from home at least part time since 2001. When I wrote a blog in 2016 about the benefits of teleworking, I received many messages of frustration about the struggle to get employers to allow staff to work from home. Most often such work arrangements at the time were denied. A positive about the pandemic became apparent. Employers are much more accepting of teleworking and hybrid arrangements. That’s a big victory (more fireworks here)!

This recent conference was a good reminder to open up, let go of the past, live in the moment, and to celebrate the victories in life as they come. I found such enjoyment with my HBG colleagues, clients and friends. I am feeling refreshed, renewed and even hopeful as we move into the time after the public health emergency has been lifted. Heck now that we know life as we know it can just come to a halt, that’s enough of a reason for all of us to live a more carefree life.

I hope to see you face to face at a future NEDRA conference, perhaps next year in New Haven, Connecticut. (Don’t forget that the Helen Brown Group awards a conference scholarship which covers registration plus some travel expenses!) Perhaps there you will discover some unexpected life lessons too.

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Can your prospects be found at a luxury private community?

To start off the new year on The Intelligent Edge, we hear from my colleague Heather Hoke who shares her knowledge on luxury private communities – their costs and amenities. If you have prospects and donors living in a private community, check out the resources Heather references below. ~Helen

It’s been a rocky start to 2021 and it wasn’t too long ago that I was saying how excited I was to leave 2020 behind and start a new year! Given everything, it’s not surprising that so many of us are ready for a change in geography, including the wealthy.

Many people are migrating from densely populated urban areas, to a place they can have peace-of-mind and feel a sense of security. Private residential club communities may be attractive to buyers now in the time of COVID-19. Stay-at-home mandates and social isolation may factor into an increased interest in resort lifestyle communities that are full of amenities.

You can be in any stage of life to live in a private community, but some are targeted specifically for families, retirement, or active adults over 55. Communities offer a variety of exclusive concierge services and amenities including an array of fitness and recreational activities, dining, social activities and even security and medical staff. It comes at a significant cost as the properties require an initiation fee and annual dues. Buyers are not only buying a home, but they are also buying a lifestyle.

Let’s explore some of the most exclusive private residential communities….

Bighorn Golf Club in Palm Desert, CA

www.bighorngolf.com

Bighorn is described as casual and comfortable. There are 470 residences and 520 club members. The $100K initiation fee for club membership includes two championship golf courses, social activities, dining venues, tennis and pickle ball, pools, a fitness center, a salon and spa, personal training, and nutritional counseling. There is also private jet and transportation services, and an ultraluxe auto gallery to house members beloved cars. A golf membership is an additional $250K. Current homes for sale are going for up to $9.6 million.

The Hideaway in La Quinta, CA

www.hideawaygolfclub.com

The real estate on the 600 acres includes 447 homes, ranging from designer-built bungalows and villas to custom-built homes of up to 10,000 square feet. Current real estate listings go up to $4.5 million. There is a $75K fee to join The Hideaway Golf and Country Club which is limited to 580 members. Along with two renowned 18-hole golf courses and a 51,000-square-foot clubhouse, recreational facilities feature a world-class spa, fitness center, pool, and sports courts.

Kohanaiki in Kailua-Kona, HI

https://kohanaiki.com

Kohanaiki features a Rees Jones-designed oceanfront golf course, a sports complex, and an Adventure Team that serve as personal guides to the island’s natural attractions of surfing, stand-up paddling, snorkeling, and diving and deep-sea fishing on Kohanaiki’s 39-foot boat. The 67,000-square-foot clubhouse is a place of relaxation and wellness that includes a spa, infinity pools, yoga lawns, relaxation areas and sweeping views of the ocean. It also has a bowling alley, movie theater, private dining rooms, a wine and cheese tasting room, cigar room, and poker room. There is even a master brewer crafting one-of-a-kind beers onsite. Current real estate listings go up to $12.5 million.

Kukui’ula in Koloa, HI

https://kukuiula.com

The 1,010-acre property designed for families offers outdoor adventure experiences, a 10-acre organic farm, hiking trails, spa, and an 18-hole golf course-dubbed one of the best courses in Hawaii by Golf Digest. On staff is a “cultural resource liaison” who oversees programming that delves into island culture, including lei making, hula dancing classes and sunset ritual ceremonies. Kukui’ula offers a range of home ownership opportunities from large home sites to villas and bungalows. Homes range from $600K to $12 million. 

The Madison Club in La Quinta, CA

https://madisonclubca.com

The Madison Club is a community with quiet neighborhoods of luxury estate residences, elegant villas and clubhouse suites. It offers a Tom Fazio-designed golf course, movie theater, game room, full-service spa, a fitness facility, on-site medical practitioner, and a “recreational and lifestyle wellness team.” Initiation fee is $200K plus $33K in dues. 

Ocean Reef Club in Key Largo, FL

www.oceanreef.com

This community is on a private peninsula and has its own 4,000-foot airstrip, school, museum, security force, and fire department. A marina with 175 slips and docks for yachts up to 175 feet are also offered. To live in Ocean Reef, a resident must be sponsored by two current members and purchase a membership for $200K.

Royal Palm Yacht and Country Club in Boca Raton, FL

www.rpycc.org

This 450-acre community has 700 estates, many on deep-water and golf course lots. Royal Palm is internationally acclaimed as one of the most exclusive yachting communities in the country. Notable features include a Jack Nicklaus Signature golf course and full-service marina. Membership is by invitation and the candidate selection process is overseen by the members. Current real estate listings go up to nearly $17 million.

Silo Ridge Field Club in Amenia, NY

https://siloridge.com

On 800 acres, Silo Ridge opened in 2018 and is a project of Discovery Land Company, a developer and operator of some of the world’s most exclusive residential club communities. Silo Ridge has $250 million worth of amenities, including a Tom Fazio-designed golf course with gourmet snack stations, an organic garden, farm-to-table dining, hunting, fishing, hiking, mountain biking, an equestrian center, a spa, an outdoor theater, and a pool with a 150-foot water slide. About a 90-minute drive from Manhattan, Silo Ridge is especially appealing to NYC residents. There are 245 predesigned houses priced at an average of $5 million and going up to more than $10 million. Members pay annual dues of $24K and an initiation fee of $100K. Silo Ridge has vertical membership where members’ children and parents also become members.

The Summit Club in Las Vegas, NV

https://summitclubnv.com

This ultra-luxury resort community on 555-acres had its first residents in 2018 and has contracted 154 of its 260 lots, pre-built residences, and clubhouse suites. There is a clubhouse for dining and events, a pickleball facility, sports and tennis courts, and a championship golf course designed by golf architect Tom Fazio. It also has mountain biking and hiking nearby in Red Rock Canyon National Conservation Area, a kid’s club, and residential services in which staff will do everything from grocery shopping to a turn-down service and housekeeping. Some of the homes built were more than $20 million. The average custom lot sells for more than $3.5 million. Club membership is $200K, annual dues are $39K and homeowner’s association fees are $16.8K.

Yellowstone Club in Big Sky, MT

https://yellowstoneclub.com

Yellowstone Club is the world’s only private ski and golf community. Designed by Discovery Land Company, it is situated in the Rocky Mountains spanning 15,200 acres with 2,900 acres of ski trails and an 18-hole golf course. There is a 282-acre ranch under contract there for $18 million and custom homes ranging from $11 million to $29 million. The grounds are reportedly protected by a security team that is led by a former Secret Service officer and it has its own fire department and emergency medical services team. The Club is limited to 864 members. Initial membership fees are $400K, and there is an annual fee of $41.5K.

 

These properties seem to have everything you will ever need to ease even the most stressed mind and body!

You can do some prospecting around private communities too. A helpful resource is the Private Communities Registry (www.privatecommunities.com) which is searchable by state for various community-types including gated, golf, luxury, and equestrian communities. Perhaps some of your constituents already live there!

In 2021, I am looking for wellness, peace of mind, and to be outside in nature as much as possible. Now I need to figure out a way to move to Kohanaiki! Since there is a master brewer on staff there, I have buy-in from my husband!

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A Peek Into Exclusive Golf Club Memberships

Sometimes when you’re in the middle of researching someone, you never know what piece of information is going to provide you with insight into their wealth. This week my colleague Heather Hoke wrote a treat of an article on exclusive golf clubs and how much a person would need to spend (or earn) to belong. Enjoy! ~Helen

We frequently associate private golf clubs with wealth and privilege. What comes to mind is perfectly manicured grounds, beautiful scenery, a massive clubhouse, parking valets, and members sipping cocktails in a room with an abundance of dark paneling. There is a high price to membership for such clubs with elite rosters, with initiation fees that can reach seven figures, and wait lists that can be years long.

The most exclusive golf clubs are quite secretive about the cost of membership and the process to become a member. Most are by invitation only and require that an existing member (or two or three) refer someone for membership. Then the Board often evaluates each candidate as well.

Among the costs to join a club are an initiation fee, annual dues, and a monthly minimum spend for food and drink. Some clubs also divide up the cost of grounds maintenance among its members.

How do you find out if someone is a member of an exclusive golf club?

I use GHIN (Golf Handicap and Information Network) which is a handicapping service provided by the U.S. Golf Association. There are more than 14,000 participating clubs and more than 2 million golfers using GHIN, and usage has expanded outside the U.S., too. It’s a great resource to check if an individual is a golfer and what clubs they are members of, and it is also a way to find possible connections to your organization. Here are some of the priciest clubs:

Augusta National Golf Club in Augusta, GA
  • Initiation fee: $250,000-$500,000; Annual dues: $10,000+
  • Home to the prestigious Masters tournament and voted the #1 Platinum Club of the World, Golf & Country Clubs for 2018-19, membership is strictly invitation only. In fact, making it known that you are interested in being a member is a sure way not to be invited! The club’s 300 members are not allowed to speak publicly about club policy.
The Bridge in Bridgehampton, NY
  • Initiation fee: $1 million
  • It has only about 150 members and is not a traditional club. It has a contemporary clubhouse with a relaxed atmosphere where wearing jeans or a cap are encouraged.
Cherokee Town and Country Club in Atlanta, GA
  • Initiation fee: $200,000; Annual dues: $7,500
  • To be considered for membership, a recommendation must be made by at least four members.
The Chicago Golf Club in Wheaton, IL
  • Fees: Unknown
  • One of the five founding clubs of the U.S. Golf Association in 1894, this club limits its members to about 100.
Congressional Country Club in Bethesda, MD
  • Initiation fee: $150,000
  • Founded in 1924, members of Congress and U.S. Presidents are among the membership. There is a 10-year wait list.
The Country Club in Brookline, MA
  • Fees: Unknown
  • This was the first country club in the U.S., starting as an equestrian and social club in 1882 (golf being introduced in 1893). It is surrounded by fence and has a guard house with a “guard” that is a mannequin named “Woody.” It has been selected to host the 2022 U.S. Open.
Cypress Point Club in Pebble Beach, CA
  • The fees are determined by yearly running costs which are divided between members regardless of how often they use the club. It has 200-250 members and on average, only 30 golfers play a day.
East Hampton Golf Club in East Hampton, NY
  • Initiation fee: $400,000
  • Members must either have a net worth of $1 million+ (excluding homes and cars) or earn more than $200,000 a year.
Fishers Island Club in Fishers Island, NY
  • Fees: Unknown
  • It is only accessible by ferry or private plane.
Friar’s Head in Riverhead, NY
  • Initiation fee: $250,000+
  • Described by some as feeling like a new-age luxury hotel, it has its own helicopter approach and landing pad.
Hillcrest Country Club in Los Angeles, CA
  • Initiation fee: $185,000-$275,000
  • A home visit and tax returns are requirements for membership.
Liberty National Golf Course in Jersey City, NJ
  • Initiation fee: $450,000-$500,000; Annual dues: $29,000
  • Across from Manhattan, it has a marina and private vessel for its 200 members. It cost $250 million to build, making it the most expensive golf course ever built.
The Los Angeles Country Club in Los Angeles, CA
  • Fees: Unknown
  • It’s considered ultra-exclusive and has a strict no ‘movie-star’ policy. It will be the location for the 2023 U.S. Open.
Nanea Golf Club in Kailua-Kona, HI
  • Fees: Unknown
  • Since its creation in 2003, it has become one of the most exclusive, secluded and secretive clubs in the world. Membership is by invitation only and it is even difficult to find by GPS.
National Golf Links of America in Southampton, NY
  • Initiation fee: $150,000+; Annual dues: $10,000
  • Opened in 1909 by a group of Wall Street executives, it has earned the nickname “America’s Snootiest Golf Course.”
Oakmont Country Club in Oakmont, PA
  • Initiation fee: $75,000+
  • Apart from Augusta National, Oakmont has hosted more major Championships than any other course in the U.S. and is considered one of the toughest courses in the world.
Pine Valley Golf Club in Pine Valley, NJ
  • Fees: Unknown
  • The member list is a closely guarded secret of the Board, who are the only ones allowed to extend invitations to potential members. The membership is male-only, with women allowed to play on Sundays.
Sebonack Golf Club in Southampton, NY
  • Initiation fee: $650,000-$1 million
  • Membership is capped at 200 at this club on 300-acres of waterfront.
Seminole Golf Club in Juno Beach, FL
  • Fees: Unknown
  • With only 300 members, it is so exclusive it even turned down golf pro Jack Nicklaus. Members get to take part in an annual tournament where members are paired with pro golfers.
Sherwood Country Club in Thousand Oaks, CA
  • Initiation fee: $160,000-$200,000; Annual dues: $7,300
  • It has around 475 members, including many Hollywood stars.
Shinnecock Hills Golf Club in Southampton, NY
  • Fees: Unknown
  • Host of the 2018 U.S. Open, it is the #3 Platinum Club of the World, Golf & Country Clubs 2018-19. Members can invite guests, but guest tee times usually fill up months in advance and there is a $350 green fee.
Winged Foot Golf Club in Mamaroneck, NY
  • Initiation fee: $200,000+
  • It will host the 2020 U.S. Open.

This is just a glimpse into some of the priciest golf clubs. Do you have any to add to the list? What exclusive clubs are near you?

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This is a game-changer!

Is there anything more fun in fundraising intelligence than sharing resources with others? My colleague Heather Hoke shares a glimpse into one of those moments of shared excitement that sparked this article where she shares a ton of her favorite resources. ~Helen

In August, I had the opportunity to attend the APRA conference in Pittsburgh where I sat in on some informative sessions and met development researchers with years of experience and those just starting out in the profession. I also had some great conversations with other attendees, one of which led to my idea for this article. [Read more…]

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No Budget For Paid Research Resources? This is for you!

This week we welcome HBG Senior Researcher Heather Hoke to share her knowledge on the blog. Every year, nearly a third of attendees at our professional association conference are brand new to our field. The Apra conference in July is one of the best places for new researchers to find in-depth training and unparalleled opportunities to network, test-drive critical resources, and learn from experienced colleagues. If you don’t have the budget this year but still need information to get you started, Heather’s article will help launch you with lots of advice and resources.

I have been a development researcher for more than 15 years and have had the opportunity to meet many new researchers starting out in our profession who need to learn the basics. It’s an exciting time for them, but our field can be a bit overwhelming.

I have met folks just starting out in a non-profit or educational institution with no prior experience or training on how to do prospect research to advance fundraising. And sometimes, to make things more difficult, there may be no researcher on staff to guide them. [Read more…]

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The most popular articles of 2016 from The Intelligent Edge

I’m going to get to the top posts of 2016 in just a second, but as we bid goodbye to 2016 – a rollercoaster year if ever there was one – we at The Helen Brown Group wanted to take a moment to say thank you.

To our clients, thank you for making 2016 our best year yet. Your missions – and your personal dedication to them – inspire us to do our best work for you. Our appreciation also goes out to the kind folks who point others in our direction – grateful thanks for your referrals.

To our 1,200+ Intelligent Edge subscribers and to the readers who drop by, thanks for signing up, for reading, and for your comments, both on and offline. Two years ago, our mailing list comprised 65 hearty souls! We couldn’t be prouder of the way our readership has grown or thank our wonderful guest bloggers enough. Thank you.

We also really appreciate our vendor partners, who make the great tools we use and who share our commitment to using quality information to make the world a better place.

And to our colleagues in the prospect development community – thank you so much for your support and for the part you play in building and growing this wonderful profession.

And now, to our top five… [Read more…]

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Why Virtual Workers Are a Real Asset

This month we welcome HBG Research Associate Heather Hoke to the blog. Even before she joined HBG, Heather had years of experience with the benefits of being a remote worker. In this week’s post, Heather shares her knowledge and some of the latest research on why virtual workers may make sense for your organization.home office shed

Are you looking to hire or retain a superstar fundraising researcher? Consider implementing flexible work arrangements, including work-from-home (WFH) policies. There are benefits to both employers and employees.

Based on what I see on Prspct-L and APRA’s Career Center, many nonprofits are hiring new staff in prospect development. There are some 5,300 colleges and universities and more than 1.5 million nonprofits in the US, and there are about 2,000 APRA members worldwide. As you can see, the potential pool of development researchers to be employed at these institutions is quite small. If you are not looking to hire now, you likely will be in the future. A survey released by CareerBuilder found that more than one in five employees are planning to leave their current place of employment during 2016, a 5% increase since last year. Why not do something that will keep your best employees and expand your hiring pool to include people that live in other states? [Read more…]

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