by John Darer CLU ChFC MSSC CeFT RSP CLTC
Buffalo Business First published its 2022 Book of Lists on January 28, 2022, a compilation that includes an August 2021 list of Buffalo's biggest financial advisers by assets under management. The Buffalo Business First report, compiled by data reporter Paul C. Lane, begs a question concerning Buffalo's Monolith Advisors, LLC, a subsidiary of Seventh Amendment Holdings LLC in downtown Buffalo.
- August 13, 2021 It is reported in Buffalo Business First that Monolith Advisors, LLC has $350 million of assets under management (see image below)
- November 1, 2021 Monolith Advisors, LLC submits its Form ADV, listing $117.2 million of assets under management. Monolith Advisors, LLC Form ADV. The form ADV is signed by John T. Bair, denoted therein as its President and Chief Compliance Officer. The Form ADV submission indicates it was revised in 10/2021.
That's a shocking $234 million disparity in only a few months. What's up with that? I contacted Buffalo Business First reporter Paul C. Lane at 235pm February 7, 2022 and he stated that he obtained the $350 million in AUM used in the August 13, 2021 publication "from a company representative, in July 2021"Lane would not reveal the individual's name when asked.
Who is the mystery company representative?
The Buffalo Business First publication lists number of Monolith advisers as 3. The SEC's IAPD records list John T. Bair, Amy Lynn Fogle and Laura Fetto as the company's 3 investment advisers. Which one of these 3 individuals allegedly spoke with Buffalo Business First reporter Paul C. Lane?
What could possibly be the explanation of the huge $232.8M disparity in assets under management reflected in the two published sources? It certainly cannot be chalked off as a rounding error. Pay close attention to what Monolith Advisors discloses to Buffalo Business First the next go round and on its Form ADV.
What is Form ADV?
Form ADV is the uniform form used by investment advisers to register with both the SEC and state securities authorities. The form consists of two parts, both of which are available to the public on the SEC’s Investment Adviser Public Disclosure (IAPD) website.
Part 1 requires information about the investment adviser’s business, ownership, clients, employees, business practices, affiliations, and any disciplinary events of the adviser or its employees. Part 1 is organized in a check-the-box, fill-in-the-blank format. The SEC reviews the information from this part of the form to manage its regulatory and examination programs.
Part 2 requires investment advisers to prepare narrative brochures that include plain English disclosures of the adviser’s business practices, fees, conflicts of interest, and disciplinary information. The brochure is the primary disclosure document for investment advisers and must be delivered to advisory clients.
Part 3, the “relationship summary,” requires SEC-registered investment advisers that offer services to retail investors to prepare a brief plain English summary about the types of services the adviser offers, the fees and costs clients will have to pay for those services, the conflicts of interest the adviser may have, the required standard of conduct, any legal and disciplinary history, key questions to ask the adviser, and references to where clients can find more detailed information about the adviser and the services they offer.