SEC Order: Personal Financial Planning, Inc. - Failure to File and Deliver Form CRS, Study Guides, Projects, Research of Business

Download SEC Order: Personal Financial Planning, Inc. - Failure to File and Deliver Form CRS and more Study Guides, Projects, Research Business in PDF only on Docsity! UNITED STATES OF AMERICA Before the SECURITIES AND EXCHANGE COMMISSION INVESTMENT ADVISERS ACT OF 1940 Release No. 5965 / February 15, 2022 ADMINISTRATIVE PROCEEDING File No. 3-20766 In the Matter of PERSONAL FINANCIAL PLANNING, INC. Respondent. ORDER INSTITUTING ADMINISTRATIVE AND CEASE-AND- DESIST PROCEEDINGS PURSUANT TO SECTIONS 203(e) AND 203(k) OF THE INVESTMENT ADVISERS ACT OF 1940, MAKING FINDINGS, AND IMPOSING REMEDIAL SANCTIONS AND A CEASE- AND-DESIST ORDER I. The Securities and Exchange Commission (“Commission”) deems it appropriate and in the public interest that public administrative and cease-and-desist proceedings be, and hereby are, instituted pursuant to Sections 203(e) and 203(k) of the Investment Advisers Act of 1940 (“Advisers Act”) against Personal Financial Planning, Inc. (“PFP” or “Respondent”). II. In anticipation of the institution of these proceedings, Respondent has submitted an Offer of Settlement (the “Offer”) which the Commission has determined to accept. Solely for the purpose of these proceedings and any other proceedings brought by or on behalf of the Commission, or to which the Commission is a party, and without admitting or denying the findings herein, except as to the Commission’s jurisdiction over it and the subject matter of these proceedings, which are admitted, Respondent consents to the entry of this Order Instituting Administrative and Cease-and-Desist Proceedings Pursuant to Sections 203(e) and 203(k) of the Investment Advisers Act of 1940, Making Findings, and Imposing Remedial Sanctions and a Cease-and-Desist Order (“Order”), as set forth below. III. On the basis of this Order and Respondent’s Offer, the Commission finds that: 2 Summary 1. This matter involves PFP’s failure to file with the Commission and to deliver to retail investor clients its Form CRS. PFP was required to file its initial Form CRS with the Commission as Part 3 of its Form ADV and to begin delivering its Form CRS to prospective and new retail investor clients, as applicable, by June 30, 2020. PFP was further required to deliver its Form CRS to existing retail investor clients by July 30, 2020. The firm failed to file and deliver Form CRS by these deadlines, not becoming compliant until in or after March 2021. As a result, PFP violated Advisers Act Section 204 and Rules 204-1 and 204-5 thereunder. Respondent 2. PFP is an Illinois corporation with its principal place of business in Deerfield, Illinois. PFP has been registered with the Commission as an investment adviser since January 2004. On its Form ADV dated March 8, 2021, PFP reported that it had approximately $896,985,000 in regulatory assets under management and 100 individual clients. PFP does not charge assets under management fees and instead charges its clients annual retainer fees that encompass both tax planning advice and investment advice. Facts 3. On June 5, 2019, the Commission adopted Form CRS and rules creating new requirements—the Form CRS Filing Requirement and the Form CRS Delivery Requirement (collectively, the “Requirements”)—for Commission-registered investment advisers offering services to a retail investor.1 See Form CRS Relationship Summary; Amendments to Form ADV, Release Nos. 34-86032 & IA-5247 (June 5, 2019) (effective September 10, 2019) (“Form CRS Adopting Release”). 4. The Form CRS Filing Requirement. First, Rule 204-1(e) under the Advisers Act requires all Commission-registered investment advisers offering services to a retail investor (“Retail RIAs”) to amend their Form ADV by electronically filing on the Investment Adviser Registration Database (“IARD”) an initial Form CRS satisfying the requirements of Part 3 of Form ADV no later than June 30, 2020. 5. The Form CRS Delivery Requirement. Second, Rule 204-5 under the Advisers Act requires Retail RIAs to deliver their current Form CRS to each retail investor client. Specifically, under Rule 204-5(b) under the Advisers Act, the Retail RIA must deliver: (1) to each retail investor client its current Form CRS before or at the time the firm enters into an investment advisory contract with that client; and (2) to each retail investor client who is an existing client the Retail RIA’s current Form CRS before or at the time the firm: 1 For purposes of Form CRS, the term “retail investor” means “a natural person, or the legal representative of such natural person, who seeks to receive or receives services primarily for personal, family or household purposes.” Rule 204-5(d)(2) under the Advisers Act.