6 Things to Check on a Financial Advisor's Form ADV Before You Hire Them

6 Things to Check on a Financial Advisor's Form ADV Before You Hire Them

Every registered investment adviser in the country writes a long document about itself, files it with a regulator, and is generally required to hand it to you before you sign anything.

Almost nobody reads it.

Knowing what to look for on Form ADV is the closest thing there is to a free background check on a financial advisor. It is public, it is searchable, and the firm wrote it under a legal obligation to disclose things it would rather you not ask about. Here is where to look and what the answers mean.

Where to Find a Financial Advisor Form ADV

Go to adviserinfo.sec.gov, the SEC's Investment Adviser Public Disclosure site. It covers SEC-registered firms and most state-registered firms, and it links out to FINRA's BrokerCheck for anyone who is also a broker.

Search the firm name, then the individual's name. Both matter, because they file different things.

A quick note on who registers where. Firms with $100 million or more in regulatory assets under management generally register with the SEC. Smaller firms generally register with their state, and mid-sized firms between $25 million and $100 million register with the SEC only in specific circumstances. The $110 million figure you will see repeated online is a different number, and both are real. Under SEC Rule 203A-1, registration is optional between $100 million and $110 million and mandatory at $110 million, and a firm already registered can stay registered down to $90 million. Form ADV Item 2.A asks about the $100 million eligibility point. Source: 17 CFR 275.203A-1.

State registration is not a warning sign. It usually just means the firm is smaller.

1. Item 5 of Part 2A: Fees and Compensation

Form ADV comes in parts. Part 1A is the check-the-box filing about the firm. Part 2A is the firm brochure, written in narrative plain English, and it is the part you actually read. Part 2B is a supplement about the specific person advising you. Part 3 is Form CRS.

In Part 2A, Item 5 is Fees and Compensation, and it is the first place to go.

You are not looking for the headline advisory fee, which the firm already told you. You are looking for the second layer: how the fee is billed, whether it is deducted directly from your account, what happens on termination, and which costs sit outside it. Custody charges, fund expense ratios, and transaction costs are usually disclosed here as something you pay in addition to the advisory fee.

The test: add up everything Item 5 says you might pay, then compare that to the number you were quoted verbally. If the two are far apart, ask why before the next meeting.

2. Item 9 of Part 2A, and Item 11 of Part 1A: The Disciplinary Items

Item 9 of Part 2A is Disciplinary Information. In Part 1A, the equivalent is Item 11, titled "Disclosure Information," which asks about the disciplinary history of the firm and all of its advisory affiliates.

Read both. A firm that has nothing to report will say so in a sentence.

Here is the detail almost nobody knows. Advisers are required to deliver an updated brochure or a summary of material changes to clients every year, within 120 days of their fiscal year end. Between those annual deliveries, they generally do not have to send you anything, with one exception: they must deliver an interim amendment if it includes information responding to Item 9.

So an unexpected brochure amendment landing in your inbox mid-year is, by the structure of the rule, usually disciplinary news. Open it.

3. Item 10: Other Financial Industry Activities and Affiliations

Item 10 of Part 2A is where a firm discloses that it is also a broker-dealer, or affiliated with one, or with an insurance agency, or with a fund it manages.

None of this is disqualifying. Plenty of good firms have affiliations. What you want to know is whether the person recommending a product to you gets paid differently depending on which product you choose, and Item 10 is where that structure first becomes visible.

Read it alongside Item 6, which covers performance-based fees and side-by-side management, and Item 11, which covers the code of ethics and personal trading.

4. Item 14: Client Referrals and Other Compensation

Item 14 of Part 2A is Client Referrals and Other Compensation. This is where a firm discloses that it pays for introductions, or that it receives something of value from a third party for using their platform or their funds.

If you found this advisor through a referral, this is the item that tells you whether money moved.

Again, disclosed referral compensation is legal and common. Undisclosed referral compensation is the problem. Item 14 tells you which one you are dealing with.

5. Item 12: Brokerage Practices and Soft Dollars

Item 12 of Part 2A is Brokerage Practices, and inside it, Item 12.A.1 is titled "Research and Other Soft Dollar Benefits."

The SEC requires firms to write something uncomfortable here. If a firm uses your brokerage commissions to obtain research, it must explain that it receives a benefit because it does not have to produce or pay for that research itself, and it must disclose that this creates an incentive to select a broker based on that benefit rather than on your interest in receiving most favorable execution.

That is the firm describing its own conflict, in language a regulator wrote. Read the paragraph slowly.

One thing not to look for: there is no single "conflicts of interest" item in Part 2A. Conflicts are spread across Items 5, 6, 10, 11, 12, and 14, governed by a general instruction requiring advisers to disclose material conflicts with enough specific facts that a client can actually understand them. If a brochure discusses conflicts only in the abstract, that is worth noticing.

6. Form CRS: Two Pages, One Yes-or-No Answer

Part 3 is Form CRS, the client relationship summary. SEC-registered advisers with retail investors must prepare one. It is capped at two pages in paper format, four for dual registrants, and it has to answer five required items in a fixed order.

The one to read first is Item 4, Disciplinary History, which requires a plain "Yes" or "No" to whether the firm or its financial professionals have legal or disciplinary history. No hedging, no paragraph. Yes or no.

Form CRS also prints conversation starters the SEC requires firms to include and set off visually. Five of them are worth asking out loud:

• "Given my financial situation, should I choose an investment advisory service? Why or why not?"
• "How will you choose investments to recommend to me?"
• "Help me understand how these fees and costs might affect my investments. If I give you $10,000 to invest, how much will go to fees and costs, and how much will be invested for me?"
• "How might your conflicts of interest affect me, and how will you address them?"
• "As a financial professional, do you have any disciplinary history? For what type of conduct?"

Ask them. They are on the form because the SEC decided consumers were not asking them on their own.

The Six Items at a Glance

What you want to know	Where it lives	What a clean answer looks like
What you will actually pay	Part 2A, Item 5	Fee schedule, billing method, refund on termination, third-party costs named
Whether anything has gone wrong	Part 2A Item 9; Part 1A Item 11	No events, or events explained with dates and outcomes
Who else pays them	Part 2A, Item 10	Affiliations named, or a clear statement of none
Whether they paid for your name	Part 2A, Item 14	Referral arrangements and economic benefits described
How they trade your account	Part 2A, Item 12	Brokerage selection explained, soft dollar benefits disclosed
The plain-English summary	Part 3, Form CRS	Two pages, disciplinary history answered yes or no

The Line Every Financial Advisor Form ADV Has to Print

On the cover page of Part 2A, if a firm calls itself a registered investment adviser, it must include a statement that registration does not imply a certain level of skill or training. The same cover page must say the brochure has not been approved or verified by the SEC or any state securities authority.

Registration is a filing status. It is not an endorsement, and no regulator has vouched for the firm's competence. That is the point of the required sentence, and it is a useful frame for everything else on the form.

A Note on Sam's List Profiles

Form ADV tells you about compliance and structure. It does not tell you what working with someone is like.

Anthony Syracuse, CFP is a Scottsdale, Arizona advisor who began his practice in 2022 and works with high-net-worth individuals, pre-retirees roughly five to ten years out, and people with equity compensation. Anthony Syracuse has 5 verified client reviews on Sam's List as of 2026-08-30. Each review is submitted by an individual who identifies as a client of the firm and rates it on communication, subject-matter knowledge, and overall satisfaction. Reviews reflect those individual experiences, do not represent an endorsement by Sam's List, and are not indicative of future results.

Reviews and a Form ADV answer different questions. Read both, and treat neither as a substitute for a conversation.

You can compare advisors by specialty, location, and verified reviews in the Sam's List financial advisor directory.

Frequently Asked Questions

Where can I look up a financial advisor's Form ADV for free? At adviserinfo.sec.gov, the SEC's Investment Adviser Public Disclosure site. It covers SEC-registered firms and most state-registered firms, and it links to FINRA's BrokerCheck for individuals who are also registered brokers. Search both the firm and the individual, because they file different documents.

What is the difference between Form ADV Part 2A and Form CRS? Part 2A is the firm brochure: a long narrative in 19 numbered items covering fees, disciplinary history, affiliations, brokerage practices, and conflicts. Form CRS is a two-page summary for retail investors with five fixed items, including a yes-or-no disciplinary answer and required conversation starters. Read Form CRS first, then Part 2A.

Does a disciplinary disclosure mean I should not hire the advisor? Not automatically. It means you should read what it says and ask about it directly. What matters is the nature of the conduct, when it happened, whether it involved clients, and how the firm describes it. A firm that answers plainly is a different situation from one that deflects.

When does an advisor have to give me the brochure? Before or at the time you enter into an advisory agreement. After that, the firm must annually either deliver an updated brochure with a summary of material changes, or deliver the summary with an offer to send the full brochure, within 120 days of its fiscal year end. Interim amendments generally only have to be delivered when they contain Item 9 disciplinary information.

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About the author: Kimberly Green is the cofounder of Sam's List, where business owners and high earners find vetted CPAs, financial advisors, and fractional CFOs. She's met one-on-one with 400+ financial professionals and writes from the real data behind thousands of client-advisor matches. Ask her anything about finding an accountant - she's heard it all, including the questions people are afraid to ask.