Form ADV

Form ADV is the cornerstone disclosure document for registered investment advisers (RIAs) in the United States. Any firm that provides investment advice for compensation and meets the registration thresholds must complete and maintain a current Form ADV on file with the SEC (for advisers managing $110 million or more in assets) or with the relevant state securities authority (for smaller advisers). The form is publicly searchable through the SEC's Investment Adviser Public Disclosure (IAPD) database, which investors can access free of charge.

Form ADV consists of multiple parts. Part 1 is primarily a regulatory filing containing structured data about the adviser's business, including the number of clients and assets managed, types of clients served (individuals, institutions, pooled funds), ownership and control persons, affiliated entities, and disciplinary events such as criminal charges, civil judgments, or regulatory sanctions. Regulators use Part 1 to assess risk and determine examination priorities.

Part 2A, known as the Brochure, is a narrative document written in plain English that the adviser must deliver to all prospective and existing clients. It describes the adviser's services, fee schedules, types of investments used, methods of analysis and investment strategies, potential conflicts of interest, and how the firm manages those conflicts. The Brochure must be updated at least annually and whenever material changes occur. If material changes are made mid-year, the adviser must promptly deliver an updated Brochure or at minimum a summary of those changes.

Part 2B, the Brochure Supplement, provides information about each supervised person who formulates investment advice or has discretionary authority over client accounts. It covers the person's educational background, business experience, disciplinary history, and outside business activities. Clients are entitled to receive Brochure Supplements for the specific individuals who will be advising them.

Part 3, Form CRS, was added following the SEC's Regulation Best Interest rulemaking. It is a two-page relationship summary that all retail-facing investment advisers and broker-dealers must provide, describing the nature of services offered, fees and costs, conflicts, and legal standards of conduct.

For investors evaluating an investment adviser, reviewing Form ADV is one of the most productive first steps. Disciplinary disclosures in Part 1 and conflicts descriptions in Part 2A provide context that marketing materials typically omit. Fee schedule language in Part 2A clarifies exactly how the adviser is compensated, which is essential for understanding potential conflicts between the adviser's economic interest and the client's.