Key takeaways
- Form ADV is the disclosure document every Registered Investment Advisor must file with the Securities and Exchange Commission, and it is available to the public at no cost through the SEC’s Investment Adviser Public Disclosure database at adviserinfo.sec.gov. Before hiring any financial advisor who manages investments, reading their Form ADV is the most reliable single step available for independent due diligence.
- The document has several parts, each serving a different purpose. Part 1 covers the firm’s structure, ownership, and regulatory history. Part 2A, called the Brochure, provides a plain-English narrative of the firm’s services, fees, investment approach, and conflicts of interest. Part 2B covers the individual advisor who will actually manage the account.
- Part 2A is where the substance lives for most clients. It requires disclosure of how the firm is compensated, what conflicts of interest exist, and whether any disciplinary events have occurred involving the firm or its personnel.
- Reading a Form ADV before the first meeting with any advisor shifts the balance of the conversation considerably. The document tells a prospective client what the advisor has disclosed to regulators, which is a different and often more complete picture than what gets shared in an introductory pitch.
Hiring a financial advisor to manage a substantial portfolio can feel high-stakes and requires trust in the advisor. The time horizon is long, and the decisions are consequential. So, getting the relationship wrong has compounding costs that are difficult to reverse.
The SEC recognized that asymmetry when it designed Form ADV as a mandatory public disclosure requirement for every Registered Investment Advisor operating in the United States.
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What information does Form ADV contain?
The form can be difficult to read, and Part 1 in particular reads more like a government questionnaire than a client-facing document. It contains factual disclosures about the firm’s ownership, its regulatory history, its assets under management, and its compensation structure.
Part 2A goes further, requiring narrative explanations of conflicts of interest and business practices in plain English. Both are publicly searchable, and neither requires an account or a login to access.
Graphic by Kate Farley
Form ADV filing requirements
Form ADV is used by investment advisors to register with both the SEC and state securities authorities. The requirement applies to any firm acting as a Registered Investment Advisor (RIA), a legal designation that carries with it a fiduciary standard, the legal obligation to act in the client’s best interest across all interactions rather than merely at the moment of a specific recommendation.
The SEC manages Form ADV filings through its Investment Adviser Public Disclosure (IAPD) database, a free public registry of all registered advisor filings, accessible at adviserinfo.sec.gov.
Searching the IAPD database
The free database is searchable by firm name, individual advisor name, or CRD number, the unique identifier the SEC assigns to each registered advisor and firm. The full filing history for any registered advisor is available, including prior versions of filings that the current document has superseded.
Advisors are required to deliver their brochures to advisory clients, which are also made available to the public on the IAPD website. The requirement to deliver the brochure to clients is not optional; it is a condition of registration.
Advisors must update their Form ADV annually within 90 days of their fiscal year-end and file interim updates whenever material changes occur between annual filings. A filing that has not been updated in more than a year warrants a direct question to the advisor about what may have changed.
SEC versus state registration
Firms managing under $100 million generally register with state regulators. SEC registration becomes available at $100 million in AUM and mandatory at $110 million.
State-registered advisors may appear in IAPD but are governed by state rules that vary from the federal framework. Most advisors working with high-net-worth clients managing portfolios of $2,000,000 or more will be SEC-registered, but confirming registration status is always the first step in the lookup process.
Go Further: Robo-advisors vs. Human Advisors: Pros and Cons covers how the regulatory framework for robo-advisors compares to that for human RIAs, including how Form ADV disclosures apply to algorithm-driven platforms.
Understanding Form ADV Part 1
Part 1 of Form ADV is the primary, standardized regulatory filing used by investment advisors to:
- Register with the Securities and Exchange Commission (SEC)
- Register with state securities authorities
- Report as Exempt Reporting Advisors (ERAs)
Submitted electronically via the Investment Adviser Registration Depository (IARD) system, Part 1 is structured primarily in a check-the-box and fill-in-the-blank format. It is designed to capture quantitative and operational data about a firm’s business structure, ownership, and core practices.
Part 1A: Firm information
The questionnaire is divided into two primary sections, along with several supplementary schedules. Part 1A, required for all registering firms, requests essential disclosures, including:
- Corporate identifying details
- Regulatory Assets Under Management (RAUM)
- Client demographics
- Compensation arrangements
- Financial industry affiliations (such as broker-dealer or private fund ties).
Part 1B: State-specific information
Part 1B gathers additional state-specific disclosures required only for state-registered advisors. Additionally, Part 1 mandates disclosure of direct and indirect ownership details (Schedules A and B) and includes Disclosure Reporting Pages (DRPs) to document any legal, criminal, or administrative disciplinary history involving the firm or its supervised personnel.
Beyond the initial application, Form ADV Part 1 serves as an ongoing reporting obligation. Advisors must submit an “annual updating amendment” within 90 days of their fiscal year-end and make prompt interim amendments whenever key material facts change. Amendments that require the form include:
- Business locations
- Ownership
- Disciplinary events
- And more
Regulators utilize this structured data to monitor systemic risk and schedule routine compliance examinations, while prospective and current clients can view the filings publicly through the SEC’s Investment Adviser Public Disclosure (IAPD) database.
How to read Form ADV Part 2A
Part 2A is the plain-English narrative section of Form ADV, known as the Brochure, and it contains 18 mandatory disclosure items covering everything from fee structures to disciplinary history. For a client reading a Form ADV for the first time, a few items carry more weight than others.
Item 5: Fees and compensation
This item requires the advisor to describe how they are paid, including the specific fee schedule for asset management, financial planning, or other services. It must also disclose whether the firm or its representatives receive compensation from third parties, such as referral fees, commissions, or payments from fund companies for placing client assets in particular products. Item 5 is where the difference between a fee-only advisor and one who also receives third-party payments becomes visible.
Item 6: Performance-based fees
If the advisor charges a fee tied to investment performance, this item requires disclosure of that structure and the conflicts of interest it creates. Performance fees can align advisor and client interests when structured carefully, and they can also create incentives to take on more risk than the client’s situation warrants. Item 6 explains which structure the firm uses and for which types of clients.
Item 10: Financial-industry activities and affiliations
Advisors who are affiliated with broker-dealers, insurance companies, or other financial firms must disclose those relationships here. An advisor who is also licensed as an insurance agent has a potential conflict when recommending insurance products, since they may receive a commission on products they recommend. Item 10 does not prohibit these relationships, but it requires them to be disclosed so that clients can factor them into their evaluation.
Item 11: Code of ethics and personal trading
This item requires the advisor to describe their code of ethics and how they handle situations where firm personnel might trade the same securities being recommended to clients. Front-running, trading ahead of client orders, and self-dealing are all prohibited, but this item shows how the firm monitors and enforces those prohibitions internally.
Item 14: Client referrals and other compensation
If the firm pays referral fees to third parties who send clients their way, those arrangements must be disclosed here. A referral arrangement can affect which advisor a prospect gets introduced to, and Item 14 makes the financial relationship between the advisor and the referral source transparent.
Item 9: Disciplinary information
Any legal or disciplinary event involving the firm or its management personnel within the past ten years must be disclosed here. This includes SEC or state enforcement actions, arbitration awards, civil judgments related to investment activities, and criminal proceedings. A single dated disclosure from a minor administrative matter carries different weight than a pattern of recent enforcement actions. Reading Item 9 carefully, and then searching the IAPD disciplinary history tab separately, gives a fuller picture of the firm’s regulatory track record than either source provides alone.
Go Further: When Should You Hire a Financial Advisor? covers what to look for in a fee structure, how to evaluate advisor credentials, and the specific situations where professional advisory relationships tend to produce the most value.
Part 2B: The individual advisor
While Part 2A covers the firm, Part 2B, called the Brochure Supplement, covers the specific individual who will manage the account. It discloses the advisor’s educational background, professional designations, employment history for the prior five years, and any disciplinary history specific to that individual.
For anyone working with a large firm where multiple advisors operate under the same ADV filing, Part 2B is where the individual’s background becomes visible.
Credentials and outside business activities
If the advisor holds a CFP (Certified Financial Planner) designation, a CFA (Chartered Financial Analyst), or other credentials, those will appear in Part 2B along with confirmation that they are currently in good standing. The supplement is typically shorter than Part 2A and easier to read quickly.
One detail that carries weight for clients with complex situations is the section on outside business activities. Advisors who work for other companies, sit on company boards, or operate other businesses alongside their advisory practice must disclose those activities in Part 2B. An outside business activity is not inherently a problem, but it is worth exploring if the business activity overlaps with the types of investments being recommended to clients.
How to identify conflicts of interest
A conflict of interest in an advisory relationship is any situation where the advisor’s financial incentive to act in a certain way is not perfectly aligned with the client’s interest. The SEC does not prohibit conflicts of interest; it requires that they be disclosed. Reading a Form ADV with conflicts of interest as the primary lens tends to be more productive than reading it as a straightforward background check.
Several patterns in Form ADV filings have appeared frequently enough in SEC enforcement cases to be worth identifying specifically.
Revenue-sharing arrangements
Revenue sharing arrangements are one of the most common. Some advisors receive payments from mutual fund companies or custodians based on how much client money flows into certain funds or is held at certain institutions.
These arrangements do not always result in bad advice, but they create a financial incentive to recommend affiliated products over unaffiliated ones. Items 10 and 14 are the places to look for these disclosures.
Dual registration and standards of conduct
Dual registration describes a status where an individual or firm holds both an RIA registration and a broker-dealer registration simultaneously. When acting as a broker-dealer, an advisor is subject to Regulation Best Interest (Reg BI), which requires that recommendations be in the retail client’s best interest at the time they are made.
That standard is higher than the older suitability requirement, but it remains distinct from the continuous fiduciary obligation that applies to RIAs across every interaction, not just at the moment a specific recommendation is made.
Registration status and product affiliations
Because Part 1 of the IAPD filing details the applicable standard for each stage of the client relationship, it requires thorough review. It indicates whether the firm or its principals hold broker-dealer registrations.
Advisors affiliated with firms that manufacture investment products, whether mutual funds, ETFs, separately managed accounts, or insurance products, have a potential conflict when recommending those products to clients. The conflict is not automatic evidence of wrongdoing, but it requires scrutiny. A firm that consistently places client assets in proprietary products at higher fee levels than comparable third-party alternatives warrants a direct conversation about why.
Wrap fee programs
Wrap fee programs are advisory arrangements where a single bundled fee covers both investment advisory services and transaction costs. They are not inherently problematic, but they can create an incentive to trade less frequently than would otherwise be in the client’s interest, since transaction costs are absorbed into the flat fee.
Clients in wrap-fee programs who are not receiving active portfolio management may be paying for a level of service they are not receiving. Wrap fee programs are disclosed in a separate Part 2A appendix.
Graphic by Kate Farley. Information from SEC
Regulatory oversight and enforcement history
The SEC has brought enforcement actions against advisors who failed to disclose conflicts of interest in their Form ADV filings, including cases where firms described themselves as independent while receiving undisclosed payments from fund companies whose products appeared throughout client portfolios.
The IAPD enforcement history section captures these actions when they result in a formal SEC proceeding.
Go Further: What is Elder Financial Abuse? Warning Signs covers the patterns of financial exploitation that emerge most often in trusted relationships, including those with financial professionals, and what documentation and reporting steps are available.
How to find and review Form ADV through IAPD
Accessing Form ADV through IAPD takes a few minutes once the process is familiar. The steps below apply to the current version of the database at adviserinfo.sec.gov.
Step 1: Go to adviserinfo.sec.gov
No account or login is required. The search function on the homepage allows searches by firm name, individual advisor name, or CRD number.
Step 2: Search by firm name or advisor name
If both the firm name and the individual advisor’s name are known, searching by the individual advisor’s name and then verifying firm affiliation tends to return the most specific results. Common names may return multiple results; advisors can provide their CRD number on request, which produces an exact match.
Step 3: Select the correct registration
For large firms with multiple offices or related entities, confirm that the specific entity managing the account appears in the results. Some large advisory organizations file under multiple entities with slightly different names.
Step 4: Review the filing tabs
The IAPD profile page for any advisor includes tabs for Part 1 disclosures, Part 2 brochure documents, disciplinary history, and registration details. The Part 2 tab provides the most recent ADV brochure as a PDF download. The disciplinary tab provides a separate summary of any reported events and is worth reviewing independently rather than relying solely on what appears in the brochure’s Item 9.
Step 5: Check the filing date
The date of the most recent annual filing appears on the profile. Advisors are required to update within 90 days of fiscal year end, so a filing from more than 12 months ago may indicate a compliance lapse worth exploring.
Step 6: Download the brochure and read Item 5 first
Fee disclosures answer the most immediate practical question for most clients: how the advisor is compensated, and whether any third-party payments influence their recommendations. Working through Items 9, 10, and 14 after that covers disciplinary history and conflict disclosures.
Go Further: When Should You Hire a Financial Advisor? examines how to evaluate the service model differences between advisors, including the fee structures that appear most often in different advisory categories.
How a financial advisor can help
Reading a Form ADV is not the same thing as evaluating whether a particular advisor is the right fit for a complex financial situation. The form discloses what the advisor has told regulators; it does not assess whether the advisor’s investment philosophy, communication style, or planning capabilities match what the client actually needs.
For clients managing $5,000,000 or more with complex tax positioning, estate trusts, or corporate liquidity events, the evaluation process benefits from a more structured framework than a Form ADV search alone can provide.
Fee-Only fiduciary guidance
A fee-only fiduciary is compensated only by the client and with no third-party payment arrangements. They can provide a second opinion on an existing advisory relationship as well as help structure an initial search for a new one.
A Form ADV search establishes a baseline, not a verdict. Clean regulatory records, transparent fee structures, and no undisclosed conflicts of interest are conditions that should be expected of any professional under consideration, and they are the floor rather than the full evaluation.
Beyond the Regulatory Baseline
What distinguishes advisors who are genuinely well-suited to a given client’s situation is a layer of evaluation that goes beyond the regulatory filing and into the substance of how they plan, communicate, and adapt as the client’s circumstances evolve.
FAQs
What is Form ADV?
Form ADV is the registration and disclosure document that Registered Investment Advisors are required to file with the SEC. It contains information about the firm’s ownership, services, fees, investment strategies, conflicts of interest, and any disciplinary history. Part 2A, called the Brochure, is the plain-English disclosure document that advisors must provide to clients before or at the start of an advisory relationship. All parts are available to the public through the SEC’s IAPD database at adviserinfo.sec.gov.
How do I find a financial advisor’s Form ADV?
Go to adviserinfo.sec.gov and search by the advisor’s name or firm name. No account or payment is required. The search results will include a profile page with links to the current Form ADV, prior versions, and any disciplinary history associated with the advisor or firm. Advisors can also provide their CRD number, which produces an exact match and eliminates ambiguity when common names return multiple results.
What should I look for in a Form ADV?
The most productive items to review first are Item 5 (fee and compensation structure), Item 9 (disciplinary history), Item 10 (outside business affiliations), and Item 14 (referral and compensation arrangements).
These items collectively show how the advisor is paid, what conflicts of interest they have disclosed, and whether any formal enforcement actions have been taken against them or the firm. After reviewing the form itself, checking the disciplinary history tab on the IAPD profile separately provides an additional layer of verification.
Is a Form ADV a guarantee that an advisor is trustworthy?
Form ADV reflects what an advisor has disclosed to regulators, not an independent verification of every claim. The SEC reviews filings for completeness and consistency but does not audit every data point in every submission.
Advisors have been sanctioned for making false statements in Form ADV filings. A clean Form ADV with no disciplinary history is a necessary condition for a due diligence baseline, not a sufficient one on its own.
To get a more complete picture, consider:
- Reading the form alongside checking references
- Reviewing the firm’s investment philosophy
- Reviewing the fee structure in the context of comparable alternatives
What is the difference between Form ADV and BrokerCheck?
Form ADV covers Registered Investment Advisors, firms that provide investment advice and are held to a continuous fiduciary standard. FINRA’s BrokerCheck covers broker-dealers, firms that execute securities transactions and whose recommendations to retail clients are governed by Regulation Best Interest rather than the full fiduciary standard.
An individual who is dual-registered as both an RIA and a broker-dealer representative will appear in both databases. For clients working with a large firm that offers both advisory and brokerage services, checking both databases provides a fuller picture than either one alone.
Editor’s Note: The more common American spelling of advisors is used throughout, except for when spelled differently in a proper noun or website name.
Glossary
Form ADV: The uniform registration and disclosure document filed by Registered Investment Advisors with the SEC and state securities regulators. Contains information about the firm’s business practices, fee structures, conflicts of interest, ownership, and disciplinary history. All parts are publicly available through the IAPD database at adviserinfo.sec.gov.
Registered Investment Advisor (RIA): A firm or individual registered with the SEC (or a state regulator for smaller advisors) to provide investment advice as a primary business activity. Held to a fiduciary standard that applies continuously across all client interactions. Distinct from broker-dealers, whose retail client recommendations are governed by the Regulation Best Interest standard.
IAPD (Investment Advisor Public Disclosure): The SEC’s public database of Form ADV filings, available at adviserinfo.sec.gov. Contains current and historical filings for all registered investment advisors, along with disciplinary history and registration status. Free to access with no account required.
Part 1: The first section of Form ADV, structured as a check-the-box and fill-in-the-blank questionnaire. Covers the firm’s legal structure, ownership, client types, assets under management, regulatory affiliations, and disciplinary events. Primarily used by the SEC for regulatory and examination purposes, but publicly available.
Part 2A (the Brochure): The narrative section of Form ADV, written in plain English, covering the firm’s services, fees, investment strategies, conflicts of interest, and disciplinary history. Contains 18 mandatory items organized in a fixed sequence. The primary disclosure document that advisors must deliver to clients before or at the start of an advisory relationship.
Part 2B (the Brochure Supplement): The section of Form ADV covering the specific individual advisor who will manage the client’s account. Discloses the advisor’s educational background, professional credentials, five-year employment history, outside business activities, and any disciplinary history specific to that individual.
Part 3 (Form CRS): The Client Relationship Summary, added by the SEC in June 2019 under Regulation Best Interest. A two-page document summarizing the firm’s services, fees, conflicts, and required standard of conduct. Intended to allow comparison across different types of financial service providers. Available to the public on the IAPD website.
Fiduciary standard: The legal obligation requiring a Registered Investment Advisor to act in the client’s best interest at all times, across all interactions, placing the client’s interests ahead of the advisor’s own financial interests. Distinct from Regulation Best Interest, which governs broker-dealer recommendations to retail clients at the point of a specific recommendation rather than on a continuous basis.
Regulation Best Interest (Reg BI): The SEC standard of conduct for broker-dealers serving retail clients, enacted June 2020. Requires that recommendations be in the retail client’s best interest at the time they are made, taking into account the client’s financial profile, risk tolerance, and investment objectives. A higher standard than the prior suitability requirement, but distinct from the continuous fiduciary obligation applied to RIAs across all interactions.
CRD number: The Central Registration Depository number assigned by FINRA to each registered investment advisor and firm. Provides a unique identifier that can be used to search IAPD and produce an exact match for any registered advisor, eliminating ambiguity when name searches return multiple results.
Wrap fee program: An advisory arrangement in which a single bundled fee covers both investment advisory services and transaction costs. Disclosed in a separate appendix to Part 2A. Wrap fees can create an incentive to trade less frequently than would otherwise be appropriate, since transaction costs are absorbed into the flat fee regardless of trading activity.
Dual registration: The status of an individual or firm that holds both an RIA registration and a broker-dealer registration simultaneously. When acting as a broker-dealer, the advisor is subject to Regulation Best Interest, which requires recommendations to be in the retail client’s best interest at the time they are made. When acting as an RIA, the fiduciary standard applies continuously across all interactions, not only at the moment of a specific recommendation. Both registrations are searchable through IAPD and FINRA BrokerCheck respectively.
Important Information
SteadyRetire is a retirement education platform offering practical financial resources and access to a financial advisor matching service. This article is intended for informational and illustrative purposes only and does not constitute financial, legal, tax, or investment advice. The information provided does not create a professional-client relationship and should not be used as a substitute for consultation with a qualified financial advisor, tax professional, or attorney. While we strive to provide accurate and up-to-date information, rules and regulations regarding retirement are subject to change. Always consult with a certified professional regarding your specific financial situation.
Related:
- How to use BrokerCheck to verify financial professionals
- Robo-advisors vs. human advisors: Pros and cons
- What is a fiduciary? Why the legal standard matters
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