Form ADV
The SEC registration document filed by investment advisers that discloses their services, fees, conflicts of interest, and disciplinary history.
What is Form ADV?
Form ADV is the uniform registration document that investment advisers must file with the SEC (if managing $100 million or more) or state regulators (if managing less). The form consists of two parts: Part 1 contains structured data about the adviser's business, ownership, clients, employees, and disciplinary history; Part 2 (the 'brochure') is a narrative disclosure describing services offered, fee schedules, investment strategies, risks, conflicts of interest, and key personnel. Investment advisers must deliver their Part 2 brochure to prospective clients before or at the time of engagement, and must update it annually. Investors can review any adviser's Form ADV on the SEC's IAPD database.
Example
Before hiring a registered investment adviser to manage a $500,000 portfolio, an investor reviews the adviser's Form ADV Part 2 on the SEC's IAPD website and discovers the adviser receives referral fees from certain mutual fund companies. This conflict of interest disclosure—required by Form ADV—allows the investor to evaluate whether the adviser's recommendations may be influenced by these payments.
Source: SEC — Form ADV