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market spotlight | monthly review

Despite continuing drama in the White House and the fury of Mother Nature, stock growth remained steady for much of October. Favorable corporate earnings reports, a strong jobs sector, and growing consumer income overcame any trepidations investors may have had. Each of the benchmark indexes listed here posted monthly gains, led by the large caps of the Dow, which gained over 4% for the month and is up over 18% year-to-date. The tech-heavy Nasdaq has remained steady throughout the year, reaching new highs in October. The small caps of the Russell 2000 gained less than 1.0% for the month, but is up over 10.0% since the end of 2016.

By the close of trading on October 31, the price of crude oil (WTI) was $54.54 per barrel, up from the September 29 price of $47.07 per barrel. The national average retail regular gasoline price was $2.488 per gallon on October 30, down from the September 25 selling price of $2.583 and $0.258 more than a year ago. The price of gold increased by the end of October, closing at $1,271.80 on the last trading day of the month, down $18.04 from its September 29 price of $1,289.84.

did you know?

TThe SEC adopted significant amendments to Form ADV that became effective on October 1. These amendments require additional data from the more than 12,000 registered investment advisors. According to SEC Chairman Jay Clayton, these amendments went into effect for the following reasons:

o The agency wants to use data in a more effective way to target exams

o The SEC wants to get as much information upfront on the ADV as they can

o They will use these data points on the risk profile to rank which firms are going to get an audit

Source: InvestmentNews

bright ideas

2017 Form ADV Changes & Annual Compliance Reminders:
Key Actions You Need to Take Before the End of the Year

As the industrywide push for transparency continues, the steps for Form ADV filings have also become more rigorous in 2017. With the year winding down, advisors will want to take the necessary steps to ensure they are compliant before year-end. Here are some of the biggest updates and items that may require your attention:

Annual Compliance Review & Renewal Payments
Conducting a comprehensive annual compliance review of your firm is one of the top things an SEC auditor will look for, so be sure you and your team set aside time to do so at the end of your fiscal year.

All renewal payments will also be due to FINRA on December 18. As you review your book of business, you will want to make sure you are properly filed in all the states that you are conducting business. Then, you will want to verify that you have the appropriate amount of funds in your flex funding account prior to December 18.

If you’re an SEC-registered RIA, filing is typically straightforward, but the process can become more arduous if you’re a state-registered advisor. You will have to file directly with the state(s). As you do so, make sure those filings are up-to-date prior to you paying the renewal fee. At Beacon, one of the biggest and easily correctible mistakes we see advisors make is going into an autopilot mode when filing, missing filings with states that have gone over the de minimis limits during 2017 that did not require a filing in 2016.

Form ADV
In 2017, the SEC has adopted several revisions to Form ADV that take a deeper dive on advisor data. Those revisions went into effect on October 1 of this year, but advisors are not required to provide the additional information until the next annual amendment filing, which for most advisors, will be by March 31 2018 (for those firms whose fiscal year ends December 31). As you begin preparing your filing, here are some of the most important revisions you will need to know about:

* Client Types In the past, advisors were able to report client types as a percentage of their total clients. Not any longer. Under the new revisions, you will have to report the specific number of clients by each client type. Those client types are: Individuals, HNW individuals, Banking or Thrift Institutions, Investment Companies, Business Development Companies, Pooled Investment Companies, Pension and Profit Sharing Plans, Charitable Organizations, State or Municipal Government Entities, and Other Investment Advisors, Insurance Companies, Sovereign Wealth Funds and Foreign Official Institutions, Corporations and Other.

* RAUM Client Types Starting this year, you will also be required to breakdown the amount of your regulatory assets under management by client type. Before, this was done as a percentage, allowing you to ballpark your figures, but under these new amendments, the SEC is requiring more specific data.

* Separately Managed Accounts This is a new section in Form ADV and it refers to any advisory accounts that are not Pooled Investment Accounts. Again, it’s breaking down the data and developing a more detailed account of client information.

* Custodians for SMAs Under the new revisions, you will be required to identify any custodian who holds 10 percent or more of your RAUM.

* Social Media Now, your social media such as Facebook, LinkedIn, Twitter, and others, will face more scrutiny as you will need to provide the addresses to those corporate accounts.

Beacon is here to help.

Even with these recent changes, at Beacon we make it easy for our advisors to access and export this detailed data through your secure advisor portal. For assistance with how to find the data you need, contact your personal Beacon operations specialist for support.

beacon news

Be sure to visit Beacon’s News & Press page for the latest credibility pieces to share with your clients and prospects, and follow Beacon on LinkedIn for the latest updates as they happen.

Chris Cook’s latest Investopedia article, “How to Achieve Real Diversification in Your Portfolio” was picked up by NASDAQ and Yahoo Finance!



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For Advisor Use Only, Not to Be Used With Clients

Beacon Capital Management, Inc. is an investment advisory firm registered with the Securities and Exchange Commission. Additional information about Beacon Capital Management is also available on the SEC’s website at under CRD number 120641. Beacon Capital Management only transacts business in states where it is properly registered, or excluded or exempted from registration requirements.

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