Form ADV

Contents

1. What the form is
2. The 2010 rewrite of the brochure
3. What the brochure must say
4. The supplement about the people
5. The relationship summary
6. What the form says about custody
7. The vocabulary worth knowing

Brent O’Mara is a Senior Wealth Advisor at Feltz WealthPlan, an Omaha, Nebraska Registered Investment Advisor, and every firm of that kind produces the document described here. A new client of a registered adviser receives a small set of materials before anything is signed: a brochure describing the business, a supplement describing the people, and, since 2020, a short relationship summary. The brochure and supplement are parts of Form ADV, the filing every registered investment adviser makes with the Securities and Exchange Commission or a state. A 2025 report described what a reader finds there: the adviser’s pay, its services and its registration status, and a planner quoted in the report explained that registration as an investment adviser brings the fiduciary standard with it.²

What the form is

Form ADV is the registration document of the advisory profession. It is filed when a firm registers and amended at least annually, and the brochure portion is delivered to clients. The trade press covering a 2010 SEC vote described the brochure, formally Part 2 of the form, as the document setting out a firm’s investment strategies, business practices and adviser qualifications, and noted that the filer’s size decided where it went: firms above $25 million under management filed federally, and the reform laws of that year were about to move that line to $100 million for most firms.¹ The filing goes through the Investment Adviser Registration Depository, the SEC’s electronic system, and the report explained that under the new rules advisers could draft the brochure in an ordinary word processor, convert it to a PDF and attach it to their filing.¹ The entry on the registration behind the form describes what the filing records.

Figure

The parts of the filing a client sees

1. 01
   Part 2, the brochureA narrative description of the advisory business, delivered to clients, revised in 2010 to be written in plain English with a table of contents.
2. 02
   The brochure supplementResume style information about the individuals at the firm who will serve the client, delivered to new and prospective clients.
3. 03
   The relationship summaryA short form document delivered at the start of a relationship, which the SEC said would supplement the more detailed disclosures already made in Form ADV.

The 2010 rewrite of the brochure

For years the brochure was a series of fill in the blank questions in a check the box format. On a Wednesday in July 2010 the SEC decided to do away with that, requiring instead a narrative presentation meant to be easier for the public to understand, with a table of contents so that clients could find what they wanted.¹ The agency’s chairman said in opening remarks that the old format frequently did not correspond well to an adviser’s business and in some cases did not describe the adviser’s business or conflicts in a way that was accessible to the investor; a commissioner asked advisers to honor the spirit of the change and not hand the drafting to their lawyers.¹ The general counsel of the advisers’ trade association said that advisers had already been providing most of the information, but in random places where it did not fit, and could now disclose it coherently.¹ She expected some initial cost and burden in the conversion, after which advisers would probably like the process better, and the association’s special counsel called the change an investor protection measure that had been a long time coming.¹

What the brochure must say

The revised brochure calls for expanded content. The trade press listed it: descriptions of the advisory business and the types of services offered; compensation practices, including fees based on performance and side by side management; methods of analysis, investment strategies and the risk of loss; certain history the rule requires disclosed; the code of ethics; and brokerage practices.¹ The SEC wanted all of it in plain English, stripped of dense legal language.¹ The compensation section is the one most readers turn to first, because it is where conflicts of interest are disclosed, and the entry on the ways advisers are paid explains the arrangements it may describe.

Figure

What the brochure covers after the 2010 revision

	Item	What the adviser must describe
Services	The advisory business and the types of services offered	In plain English, not legal language
Compensation	How the adviser is paid, including fees based on performance and side by side management	The part a client reads to find conflicts
Methods	Methods of analysis, investment strategies and the risk of loss	Written for the investor, not the lawyer
Conduct	The code of ethics, brokerage practices and certain history the rule requires disclosed	Delivered through the SEC's electronic filing system

The supplement about the people

The 2010 rules added a second document. New brochure supplements, the trade press reported, would have to be delivered to new and prospective clients to give resume like information about the individuals at an advisory firm who would provide services to them.¹ Where the brochure describes a business, the supplement describes a person, and together they tell a client both what the firm does and who will be doing it.

The relationship summary

In April 2018 the SEC proposed a third piece. Form CRS, a customer or client relationship summary, would give retail investors plain information about what kind of relationship they had with the professional across the desk, and the agency said the summary would supplement other, more detailed disclosures, noting that for advisers additional information could be found in Form ADV.⁴ The investor education site describes the result: advisers and brokers must hand over a relationship summary at the start of a relationship or at a change such as rolling an IRA over, and the site offers a free search tool for finding a firm’s summary.⁵ For advisers the summary is filed as Part 3 of Form ADV, which makes the form a three part document: the registration record, the brochure and supplement, and the summary. The rule that created the summary is described under Regulation Best Interest and Form CRS.

What the form says about custody

One line of the form answers a question clients rarely think to ask: does the adviser have control over their money. A 2017 trade report described an SEC letter to the advisers’ association stating that an adviser authorized by a client’s standing letter to move funds held at a qualified custodian has custody of those assets under the custody rule, and that advisers would have to include assets subject to the rule on their Form ADV beginning with the next annual updating amendment after October 1, 2017.³ The report explained that such advisers become subject to a surprise examination of custodied assets by an independent accountant unless an exemption applies, and that the consultant presenting the letter praised the SEC for the specificity of its answer even if advisers disliked it.³ The arrangement in which a separate institution holds client assets is described under what a custodian does.

Figure

Three questions the brochure is meant to answer

1. 01
   CompensationHow is the adviser compensated, as distinct from what the client pays.
2. 02
   ProductsDoes the adviser get paid, or win anything, based on the products recommended.
3. 03
   Third partiesDoes the adviser receive compensation for the relationship from anyone other than the client.

The vocabulary worth knowing

The form has a vocabulary of its own. Part 1 is the registration record, with facts about ownership, employees, clients and assets. Part 2 is the brochure, the narrative document rewritten in 2010, and the brochure supplement is its companion about individuals.¹ Part 3 is the relationship summary, Form CRS, delivered at the start of a relationship.⁵ The annual updating amendment is the yearly refiling that keeps the record current, and custody, in the form’s sense, means the authority to move or withdraw a client’s funds, whether or not the adviser ever touches them.³ Compensation and conflicts of interest are the sections that answer the questions a planner proposed in 2012: how an adviser is paid, whether pay depends on the products recommended, and whether anyone besides the client pays for the relationship.⁶ The planner’s post pointed to a news report about advisers at a large bank who said they had been encouraged to favor the bank’s own products even when competitors offered cheaper or better performing options, as an example of the kind of conflict a brochure is supposed to surface, while stressing that finding a conflict does not by itself mean anything is wrong.⁶ Reading a brochure is not the same as choosing a firm, and how the fees, services and conflicts it discloses bear on one family, and whatever tax or estate questions follow, depends on that family’s own circumstances and calls for qualified professionals.