What is Form CRS? How to read an advisory firm's relationship summary
Form CRS is a relationship summary, no more than two pages on paper (four for a firm that is both an adviser and a broker), that SEC-registered investment advisers and broker-dealers give individual investors. Under set headings it covers the firm's services, its fees, costs, conflicts, and standard of conduct, and whether the firm or its professionals have a disciplinary history, with questions to ask.
Since June 2020, SEC-registered investment advisers and broker-dealers that work with individual investors have had to give them a short relationship summary, Form CRS. It is the quickest official document to read about a firm: no more than two pages on paper, or four for a firm that is both an adviser and a broker, written in plain language under the same headings at every firm.
What each section says
- Introduction. Whether the firm is registered as an investment adviser, a broker-dealer, or both, and a pointer to Investor.gov/CRS, the SEC's site with free tools to research firms and professionals.
- Relationships and Services. What the firm offers individual investors: whether it monitors accounts, whether it has discretion to trade, whether it limits what it recommends to certain products, and any account minimums.
- Fees, Costs, Conflicts, and Standard of Conduct. The main fees you pay and how they are charged, other costs, the standard of conduct the firm owes you, examples of how it makes money that create conflicts with you, and how its professionals are paid.
- Disciplinary History. A yes or no answer to whether the firm or its financial professionals have legal or disciplinary history, and where to read it.
- Additional Information. Where to get more information and an up-to-date copy, and whom to contact with a complaint.
The questions it asks for you
Form CRS includes "conversation starters," questions the firm must invite you to ask, such as:
- "Given my financial situation, should I choose an investment advisory service? Why or why not?"
- "Help me understand how these fees and costs might affect my investments. If I give you $10,000 to invest, how much will go to fees and costs, and how much will be invested for me?"
- "How might your conflicts of interest affect me, and how will you address them?"
- "As a financial professional, do you have any disciplinary history? For what type of conduct?"
The firm's answers in a conversation, and whether they match the written summary, tell you more than the summary alone.
Who provides one, and where to find it
SEC-registered advisers and broker-dealers that offer services to retail investors must deliver Form CRS at or before the start of the relationship and post it on their website if they have one. It is also searchable through Investor.gov/CRS. Firms that serve only institutions, state-registered advisers, and exempt reporting advisers are not covered by the SEC's rule, so many small firms on AdvisorCensus don't have one; their brochure is the main disclosure.
Form CRS is a summary by design. Read it to see the shape of the relationship and the questions worth asking, then read the brochure, Form ADV Part 2A, for the firm's actual fee schedule, conflicts, and history.
Reading it alongside AdvisorCensus
Each AdvisorCensus firm page shows the filing facts the summary describes in words: how the firm is paid (Form ADV Item 5.E), whether it or its people have sales compensation ties, its disciplinary answers on Item 11, and a link to its full record on IAPD. When the summary and the filing point the same way, you can move on to the brochure; when they don't, ask why.
Common questions
Who has to provide a Form CRS?
SEC-registered investment advisers and broker-dealers that offer services to retail investors. Firms that serve only institutions, state-registered advisers, and exempt reporting advisers are not covered by the SEC's rule.
Where can I find a firm's Form CRS?
On the firm's website, where it must be posted if the firm has one, and through Investor.gov/CRS. The firm must also give it to you at or before the start of the relationship.
How is Form CRS different from the brochure?
The brochure, Form ADV Part 2A, is the full disclosure. Form CRS is the short version, with the same headings at every firm so firms can be compared. Read the summary first and the brochure for the detail.
What does the disciplinary history section mean?
Every firm must answer yes or no to whether it or its financial professionals have legal or disciplinary history, and point to Investor.gov/CRS for the detail. A yes means there is a record to read; the record says what happened.
Sources
Written from the public record and the regulators' own instructions. AdvisorCensus is a directory built from Form ADV filings; nothing here is investment advice. Spot something wrong? Tell us.