Form ADV Part 2A brochure and Part 2B supplement

Part 2 of Form ADV is the part a client reads. Part 1 is a filing of check boxes and schedules for regulators, covered in our guide to what Form ADV is. Part 2 produces two narrative documents. Part 2A is the firm brochure: the firm, its services, its fees, its conflicts. Part 2B is the brochure supplement: the same kind of facts about one person who advises the client. Part 2A also has an Appendix 1 for the sponsor of a wrap fee program, which this guide leaves aside.

Rule 204-3 is what turns the form into a delivery duty. With two narrow exceptions, the brochure goes to every client, “even if your advisory agreement with the client is oral”, in the form's own words. Supplements go to every client a covered person advises. Neither Part 2B nor Part 3 applies to exempt reporting advisers. Part 3 is Form CRS, a separate short summary for retail investors that our Form CRS builder drafts; it does not replace the brochure.

The brochure answers 19 items, in the form's order, under the form's headings. An item that does not apply is still listed and marked not applicable. Where an answer overlaps another item, the instructions let you cross-reference instead of repeating it. Item 19 applies only to state-registered advisers.

Three items carry most of a small firm's conflicts. Item 5 holds the fee schedule and, when anyone at the firm is paid for selling products, a statement that the practice “presents a conflict of interest”. Item 10 holds affiliations, such as a management person who is also a broker-dealer's registered representative. Item 12 holds broker selection and soft dollars. Item 11 points to the code of ethics, which our code of ethics guide covers, and Item 14's paid referrals send you to the SEC Marketing Rule.

A new firm writes its brochure before it has a client. The instructions say to answer “based on the advisory services you propose to provide” and the practices you propose to adopt, one of the steps in starting an RIA. A firm with substantially different services may keep more than one brochure, as long as each client receives all the information that applies to that client.

The instruction goes on to list how: short sentences, everyday words, active voice, tables or bullet lists for complex material, no legal jargon a client would not understand, no multiple negatives. The brochure should discuss only conflicts the firm has or is reasonably likely to have. Extra material is allowed, but not so much that it obscures the required information.

The word that draws the most attention is “may”. If a conflict applies to some but not all clients, the instruction says to indicate as such “rather than disclosing that you ‘may’ have the conflict”. The SEC's 2019 fiduciary interpretation, quoted in a June 2026 risk alert, puts it plainly: disclosure that an adviser “‘may’ have a particular conflict, without more, is not adequate when the conflict actually exists.”

The brochure is also not the ceiling. General Instruction 3 says that as a fiduciary the firm “may have to disclose to clients information not specifically required by Part 2 of Form ADV”, in the brochure or by other means. Answering every item does not, by itself, answer the fiduciary question. The full instructions are in the SEC's Form ADV Part 2 PDF.

The supplement tells a client who will advise them: education, five years of positions, discipline, other business, extra pay, and who supervises that person. It is owed for a person who will advise the client, and Rule 204-3(b)(3) defines that in two ways.

A supplement need not be a separate document. The instructions note that smaller firms “with just a few supervised persons may find it easier to include all supplement information in their firm brochure”; if so, the supplements go at the end of the brochure, each in Part 2B's order and headings. A sole proprietor whose brochure carries the information gives no separate supplement of their own.

Item 6 needs more care in a small firm than it looks. It asks how the firm monitors the person's advice and names the supervisor with a title and a phone number. In a two-person firm where the owner supervises the other adviser, the owner's name goes there; who supervises the owner is a question the firm's compliance program under Rule 206(4)-7 should already answer.

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Rule 204-3 sets four delivery duties: two at the start of a relationship, one each year, and one whenever disciplinary information changes. The table adds the one year in which nothing has to go out, which the instructions allow when nothing material changed.

Electronic delivery is allowed for both documents; the instructions point to the SEC's interpretive guidance on delivering documents electronically. A supervised person may deliver supplements, including their own, on the firm's behalf. Between annual updates, the instructions add a fiduciary note: the firm still has to disclose material changes to clients even when no delivery under the rule is triggered. Our Form ADV annual amendment planner turns a fiscal year end into the annual updating amendment due date and the brochure delivery steps.

The brochure is updated on two clocks. Once a year it is refiled with the annual updating amendment, which Rule 204-1(a) requires for Parts 1 and 2 “within 90 days of the end of your fiscal year”. Between those filings, it is amended promptly whenever information in it “becomes materially inaccurate”. Supplements are amended promptly whenever any information in them becomes materially inaccurate.

The word that matters is “solely”. If the brochure is being amended for another reason and the Item 4.E assets or the Item 5.A fee schedule has become materially inaccurate, the instructions say to update them in the same interim amendment.

Filing differs by document. The brochure and its amendments go through IARD as a text-searchable PDF. An SEC-registered adviser is not required to file brochure supplements, but keeps copies and makes them available to SEC staff on request. A state-registered adviser files, through IARD, a copy of the supplement for each supervised person doing business in that state. The summary of material changes goes into the annual updating amendment too, either inside the brochure or attached to it in the same PDF. The rest of the annual filing is in our Form ADV overview.

Delivery is only provable if it was recorded. Rule 204-2(a)(14) makes the brochure file a required book, and it covers more than the documents themselves.

Paragraph (a)(14) is not on the list of records Rule 204-2(e)(1) carves out, so by our reading the general period applies: kept “in an easily accessible place for a period of not less than five years from the end of the fiscal year during which the last entry was made on such record, the first two years in an appropriate office of the investment adviser.” The retention calculator runs that period from a year end, and the Rule 204-2 guide covers the rest of the adviser's books.

The delivery dates are the easiest part to lose, because they tend to sit in an email outbox or a CRM task rather than in the brochure file. Firms that want the delivery log and the brochure versions in one system compare RIA compliance software.

On June 9, 2026 the SEC's Division of Examinations published a risk alert on advisers' economic conflicts of interest, and part of it is a list of what staff found when they read Part 2A brochures. Two items came up by name. Under Item 10, advisers left out material conflicts created by compensation arrangements with affiliates. Under Item 12, advisers made disclosures that were “inconsistent with other disclosures or were incomplete”, for example about revenue sharing with clearing agencies.

The alert is a staff statement and says itself that it “has no legal force or effect”. It still shows what examiners compare a brochure against. The pattern is a brochure that is accurate on its own but disagrees with the firm's agreements, its billing or its arrangements. That suggests a read-across before each annual amendment.

The RIA compliance checklist puts this review among the year's other duties, and firms that want an outside reader for the brochure compare RIA compliance consultants. The alert itself is on sec.gov. This guide explains the form; it is not legal advice, and your compliance counsel should check your brochure against the full instructions.