Choosing an adviser
Investment advisers, who may
or may not be licensed as brokers, are paid for the
advice they give. As advisers, they’re required
to register — with the state securities office
if they manage less than $25 million in assets, or
with the SEC if
they manage more than that amount. Those who register
with the SEC have the RIA designation.
Form ADV
The vital document you need to review when choosing an investment adviser is
called a Form ADV. The document comes in two parts. The first describes the adviser’s
education, type of business, and whether regulators have taken any disciplinary
actions against the adviser. The second is the adviser’s brochure, which
describes his or her services, fees, and strategies. The form is generally timely,
because if registered advisers don’t keep it up to date, they risk having
their registration revoked. You can obtain a copy from either the state securities
office, directly from the adviser, or, for a small fee, from the SEC,
depending on the size of the adviser’s business. You can also obtain a
copy of some Form ADVs through the Investment Adviser Public Disclosure Web site
at www.adviserinfo.sec.gov.
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