from osmoda research · wealth mgmt
A Q3 ADV draft from 14 client deltas, in 52 minutes.
lantern writes the brochure your CCO actually signs. Custodian AUM pulled from Schwab, Fidelity, and Pershing/Wove; Marketing Rule policy checked; change-log ledger ready for EXAMS. The brochure-rewrite week becomes an afternoon review.
TL;DR
- • Q3 ADV Part 2A draft from 14 client deltas in 52 min for $1.40, vs the typical 3-week annual amendment cycle
- • Annual Updating Amendment due within 90 days of fiscal year-end; brochure delivery within 120 days under Rule 204-3 [SEC Form ADV Instructions]
- • A $200M RIA spends $4K–$12K/month on outsourced compliance; a deficiency-laden SEC exam can hit ~$100K
- • lantern pulls AUM and fee deltas from Schwab Advisor Center, Fidelity Wealthscape, and Pershing/Wove — and writes the change-log against last year's brochure
- • 2026 SEC Marketing Rule FAQs (Jan 15, 2026) and December 2025 Risk Alert tighten testimonial and performance disclosure
1. The pain — what the brochure rewrite costs
SEC-registered investment advisers must file an Annual Updating Amendment within 90 days of fiscal year-end and deliver an updated Part 2A brochure (or summary of material changes) to clients within 120 days under Rule 204-3. The amendment refreshes Parts 1A, 1B, 2A, 2B, and Part 3 (Form CRS) where applicable, requires reconciling AUM and fee schedules to custodian data as of December 31, and demands a change-log narrative the SEC can compare year-over-year. Compliance consumes roughly 11% of staff time at the average RIA, and a $200M firm typically pays $4,000–$12,000 per month for outsourced compliance services.
The legacy stack is the CCO at a desk, with Schwab Advisor Center, Fidelity Wealthscape, and BNY Pershing's Wove platform open, plus a compliance suite — RIA in a Box (now Comply), ACA's tooling, MyComplianceOffice, or Smarsh — for workflow tracking. Reconciling AUM deltas, restating fee schedules, redrafting brochure sections, and producing a clean diff against last year's filing is a multi-week manual exercise.
The 2026 backdrop is a tighter SEC. On January 15, 2026, the Division of Investment Management updated Marketing Rule (206(4)-1) FAQs on model-vs-actual fees and SRO-related testimonial disqualifications; the December 2025 Risk Alert flagged recurring failures in testimonials, endorsements, and third-party ratings disclosures. For a sub-$500M RIA, an SEC exam alone can run ~$70K, and a deficiency push it toward $100K — a bill that lands hardest on the firms least able to absorb it.
Comply (RIA in a Box)
Dominant workflow tool for ADV calendaring and exam prep; tracks tasks, but the CCO still drafts every Part 2 paragraph and reconciles every custodian export by hand.
ACA Group
Premium consulting plus tooling; the playbook is deep, but it is consultants billing time, not a runtime that drafts the amendment.
MyComplianceOffice
Strong on personal-trade and conflicts surveillance; complementary to ADV work, not a substitute for the brochure-rewrite labor.
Smarsh
Communications archiving and supervision (email, IM, social); essential for the recordkeeping rule, but the ADV narrative still gets written in Word.
2. The workflow — fiscal-year-end to filed
- 1 · soot's cron fires on the firm's compliance calendar (e.g., 60 days after fiscal year-end), pulling custodian exports via typed tools —
schwab.advisor_center.aum_export,fidelity.wealthscape.position_export,pershing.wove.aum_export— landing them in an immutable, hashed evidence folder. - 2 · frog reconciles AUM and fee-schedule deltas against last year's Form ADV Part 1A Item 5 disclosures, computes the 14-client material-change set, and emits a structured diff with dollar-weighted thresholds the CCO defined in policy.
- 3 · lantern drafts the Part 2A material-changes summary and the touched brochure sections (Items 4, 5, 8, 14, 18 as applicable), grounding every paragraph in the reconciled evidence and citing the underlying custodian export hash inline.
- 4 · naga gates outbound filings: KEYD signs the IARD authentication, the SEC Marketing Rule policy is run as a typed checker over the draft against the Jan 2026 FAQs and Dec 2025 Risk Alert items, and any flagged language is sent back to lantern for rewrite before submission.
- 5 · lantern stages the Annual Updating Amendment package — Part 1A, 2A summary of material changes, redline against prior brochure, IARD-ready submission, client delivery list under Rule 204-3 — and writes the full change log to the hash-chained ledger that any future EXAMS staff can replay.
3. Why it works
Sovereignty
Client AUM data is non-public personal information under Reg S-P, and an adviser is liable for any third-party AI vendor that mishandles it. osmoda runs on a dedicated NixOS box (self-hosted or EU-1 managed), KEYD vaults the IARD and custodian credentials so the LLM never holds them, and post-quantum mesh protects the AUM exports in transit between firm machines.
Workflow integrity
The ADV is a year-over-year document and the SEC reads diffs. Every edit lantern makes is appended to a SHA-256 hash-chained ledger with the source evidence, the prompt, and the reviewer attestation; the resulting redline is reproducible byte-for-byte. Atomic NixOS deploys mean a model or template change does not silently re-write last quarter's filing.
Economics
A $200M RIA spending $4K–$12K/month on compliance is buying 80% workflow tracking and 20% drafting; lantern collapses the drafting half to 52 minutes and $1.40 of compute per quarterly amendment. The CCO becomes a reviewer of structured diffs, not a typist of brochure sections.
FAQ
Can lantern actually draft the SEC-facing Part 2A brochure?
It drafts the material-changes summary and the touched brochure sections, grounded in the reconciled custodian evidence and last year's filed brochure, with every paragraph traceable back to a hashed source. The CCO reviews and signs; the agent does not file. That keeps Rule 206(4)-7 supervision intact while removing the typing labor that consumed three weeks.
How does this stay current with the 2026 Marketing Rule guidance?
The SEC's January 15, 2026 IM FAQ updates and the December 2025 Risk Alert are encoded as a typed policy checker that naga runs over the draft. When the SEC ships another FAQ, you update one policy file, redeploy atomically with NixOS, and the next quarter's draft inherits the new rule. The ledger records which policy version was applied to each filing.
How does it integrate with Schwab, Fidelity, and Pershing custodians?
Through typed integration tools — Schwab Advisor Center, Fidelity Wealthscape, and BNY Pershing/Wove — that pull AUM, position, and fee-schedule data on the schedule the CCO defines. Each export is hashed on arrival and used as the only ground-truth source for ADV reconciliation, so the answer to "where did this number come from" is one ledger lookup away.
Cut the Q3 ADV cycle from three weeks to 52 minutes — and hand EXAMS the ledger.
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