Required Disclosures to Clients
Chapters in this video
- 0:00 The fiduciary duty and why omission equals fraud
- 1:49 Form ADV Part 2A versus Part 2B
- 2:36 State-registered adviser brochure delivery: 48 hours or 5 days
- 3:37 Annual update deadlines: 90 days for regulators, 120 days for clients
- 4:47 Federal versus state brochure delivery distinction
- 5:14 Broker-dealer fee schedule exclusions and commission disclosure
- 6:02 The six material facts questions and rapid-fire recap
What this video covers
- Why omission of a material fact is legally identical to fraud under the Investment Advisers Act of 1940 (IAA) and the Uniform Securities Act (USA)
- What Form ADV Part 2A discloses (the firm brochure) versus what Part 2B discloses (the individual investment adviser representative supplement)
- The either-or delivery rule for state-registered advisers: 48 hours pre-contract OR at signing with a 5-business-day termination right
- Why federal-covered advisers face a simpler rule (before or at contract signing) with no 48-hour option and no penalty-free window
- The two distinct annual deadlines: 90 days to file Form ADV updates with regulators versus 120 days to deliver updates to existing clients, and why the March 31 decoy fails for client delivery
- Why standardized broker-dealer fee schedules exclude commissions and markups, which instead appear on trade confirmations after execution
- The 30-day advance written notice required for broker-dealer fee schedule changes, and why the 60-day decoy answer is wrong
Read the full lesson, free
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