The size of the financial planning firm dictates where you find Form ADV Part I. If your financial planner or his firm manages $25 million or more in assets, the company is required to register with the SEC with limited exceptions. You can find the forms in the commission's searchable database.
Firms managing less than $25 million in assets are required to register with the state securities regulator. In that case, you can get Form ADV Part I from the regulator. Find yours at the North American Securities Administrators Association's website, NASAA.org.
Part II of Form ADV is even more detailed and comes from the adviser himself. Advisers are required to furnish you with Part II before you sign on as a client, and annually afterward.
This form will provide details on the educational background and experience of all the decision-makers at the firm along with a fee schedule and information on how the firm bills clients. It will reveal any partnership or reciprocal agreements with other businesses as well as any possible conflicts of interest, says Cabaniss.
While most of the time you'll have to get this form from the CFP personally, the forms are starting to appear on the SEC site (the agency is transferring this form to its database but the work isn't completed), says the NAPFA Chief Executive Officer Ellen Turf.
Is your CFP also a broker dealer?
Many Certified Financial Planners are also broker dealers, says Tobie Stanger, senior editor for Consumer Reports magazine. If yours is one, you'll have access to even more background information.Get details on the broker and brokerage, including qualifications, credentials, previous employers going back 10 years and disciplinary actions through the Washington D.C.-based Financial Industry Regulatory Authority, or FINRA, the self-regulatory agency for the securities industry.
There can sometimes be a "lag time" between any actions and postings, says Stanger.
So check back from time to time as information is updated.
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