Investment advisory firms are required to file disclosure documents with the Securities and Exchange Commission (SEC). These documents help consumers learn about some of the risks or potential conflicts of interest associated with a specific firm or compare two different investment firms.

Form ADV Part 1 is available online at the SEC website. You can use that site to determine if your advisor has any regulatory complaints.

Form ADV Part 2 and Part 3 are also available on the SEC site. We put our ADV Part 2 brochure and Part 3 Form CRS online so that is it easy for prospective clients to view and use as a comparison against other firms’ answers to the same questions.

You can read the Marotta 2020 ADV Part 2 and Form CRS Marotta 2020 ADV Part 3 here.

When interviewing a new financial advisor, we believe there are ten important questions to ask (see “Ten Questions to Ask a Financial Advisor“).

  1. Do you use a recognized third-party custodian to hold your clients’ assets?
  2. Is there a good chance my investments will lose money?
  3. Is the daily price of everything you invest in listed in the Wall Street Journal?
  4. Do you avoid hedging or buying options? Does everything you invest in trend upward?
  5. Could you teach me to implement your investment strategy and let me do it on my own?
  6. After selecting your investment approach, could I change my mind at any time, immediately recoup everything left of my investment and have no financial hooks to keep me from dropping your approach?
  7. Do you report a client-specific time-weighted return each quarter?
  8. Do you live a frugal lifestyle?
  9. Is the fee I pay you the only compensation you receive?
  10. Do you sign a fiduciary oath?

We discuss these questions and more in our ADV Part 2 brochure as well as on our Frequently Asked Questions.

The SEC also has a list of so-called conversation starter questions they require be included in each adviser’s Form CRS. We have answered those questions in the article “Our Answers to Form CRS Conversation Starter Questions.”