DEFINITION:
Form ADV is a regulatory document that investment advisers must file with the SEC, which details their business practices, fees, conflicts of interest, and disciplinary history.
WHEN AND WHY IT’S USED:
Form ADV is used to provide transparency and essential information to current and prospective clients. It is typically reviewed during the onboarding process to help you understand an adviser’s background, fee structure, and any potential conflicts of interest. This document is a key resource for conducting due diligence on an adviser’s practices and qualifications.
IMPORTANCE IN COMMUNICATION:
Discussing Form ADV with your advisor reinforces the importance of transparency in the advisory relationship. It provides a clear picture of the adviser’s credentials, fee arrangements, and any past regulatory issues, fostering trust and accountability. Clear communication about this document ensures that you are well-informed about the background and practices of the adviser you are working with.
Moreover, by reviewing Form ADV together, you can ask targeted questions about any areas of concern or interest. This proactive dialogue enhances your ability to make informed decisions and ensures that the advisory relationship is built on a foundation of clarity and ethical practices.