05/14/20 – The SEC adopted a new rule on June 5, 2019 requiring registered investment advisers and registered broker-dealers to provide a brief relationship summary, Form CRS, to retail investors.
Form CRS will provide information specifically tailored to educate retail investors about financial professionals. It will include:
- search tools to research firms and financial professionals;
- information about brokers and advisers; and
- information about brokers’ and advisers’ different services and fees.
What is Form CRS?
Form CRS is a client or customer relationship summary. Advisers and brokers are required to deliver a relationship summary to you beginning in summer 2020. The relationship summary contains important information about the adviser or broker.
Why should I read a relationship summary?
Choosing or continuing to work with a financial professional is an important decision. Advisers and brokers offer different types of services and are paid differently. Reading a relationship summary can help you decide if an adviser or broker is right for you.
What information is in a relationship summary?
A relationship summary tells you about:
- the types of services the firm offers;
- the fees, costs, conflicts of interest, and required standard of conduct associated with those services;
- whether the firm and its financial professionals have reportable legal or disciplinary history; and,
- how to get more information about the firm.
A relationship summary also includes questions to help you begin a discussion with an adviser or broker about the relationship, including their services, fees, costs, conflicts, and disciplinary information.
When will I receive a relationship summary?
Beginning in the summer of 2020, advisers and brokers will give you a relationship summary when starting a relationship with you or when your account changes (e.g., you rollover an IRA). If the information in the relationship summary changes, your adviser or broker will be required to give you a new relationship summary or communicate the changes through another disclosure that must be delivered to you. You can also always request a relationship summary.
If you already have a brokerage or advisory account, you will get your first relationship summary by July 30, 2020.
You will be able to find a firm’s relationship summary and find more information about a firm using the free and simple search tool on Investor.gov.
More information about Form CRS.