Section 4.2Laws, Regulations, and Guidelines

Form ADV Architecture & Brochure Delivery Rules

Reviews Form ADV Parts 1 and 2, Brochure delivery rules, brochure supplements, and annual maintenance timelines.

Key Exam Takeaways

Form ADV Part 2A (Firm Brochure) is delivered to clients initially at least 48 hours before signing OR at signing with a 5-day cancellation right.
Form ADV Annual Updating Amendment must be filed within 90 days of the adviser's fiscal year-end.
Material changes summary must be delivered to clients within 120 days of fiscal year-end, with an offer of the full brochure.

Common Exam Traps

Remember the 90-day vs. 120-day rule: 90 days to file annual amendment with regulators; 120 days to deliver annual updates to clients.
Form ADV Part 2B (Brochure Supplement) is required for every individual supervised person who formulates investment advice or has direct client contact.

Form ADV is the uniform application for investment adviser registration. Part 1 contains administrative and demographic data for regulators. Part 2 serves as the client disclosure brochure written in narrative plain English.

Part 2A covers the advisory firm's services, fees, investment strategies, conflicts of interest, disciplinary disclosures, and custody practices. Under state law, the brochure must be delivered at least 48 hours prior to entering into an advisory contract, or at contract signing provided the client has 5 business days to cancel without penalty.

Part 2B is the Brochure Supplement detailing the specific background of individual advisers (education, business background, disciplinary history). Annually, advisers must file updating amendments via IARD within 90 days of fiscal year-end and deliver a summary of material changes to clients within 120 days.

🎯 Knowledge Checkpoint

Knowledge Checkpoint • Section 4.2

A newly hired Investment Adviser Representative (IAR) joins a registered advisory firm to manage client portfolios and provide individualized financial plans. Which disclosure document must be delivered to each client who will receive advice from this IAR, and what disclosures must it contain?