Registered broker-dealers and registered investment advisers are required to provide a new customer or client relationship summary (also called Form CRS) to retail investors. SEC staff designed this Investor.gov page to help investors better understand how to use the relationship summary when choosing a financial professional. This page also provides links to educational resources and a free and simple search tool that can help you research firms and financial professionals.
What can I learn from a relationship summary?
A firm’s relationship summary tells you about:
- the types of services a firm offers;
- the fees and costs you will have to pay for those services;
- conflicts of interest a broker or adviser may have;
- the required standard of conduct associated with the services a firm offers;
- whether a firm and its financial professionals have reportable legal or disciplinary history; and
- key questions (conversation starters) to ask your financial professional.
Each firm’s relationship summary uses similar headings and order of topics to make it easy for you to compare firms.
What are broker-dealers and investment advisers?
The SEC requires two types of firms to provide relationship summaries: broker-dealers (brokers) and investment advisers (advisers). Both brokers and advisers can give you advice about buying investments like stock in a company or an index fund. After you buy, they can also give advice on whether to sell or continue to hold the investments.
Many firms are registered as both a broker and an adviser. They are called dual registrants. In some cases, a combination of services offered by each type of firm may be a good choice for you depending on your investment goals, preferences, and needs. If your investment professional offers both brokerage and advisory services, make sure you understand when they are acting as a broker and when they are acting as an adviser.
Brokers and advisers differ in the types of services they provide and how you pay for them. For more information, read below.
What are the different services that brokers and advisers offer?
The services you receive will depend on your agreement with the broker or adviser.
Brokers provide services that are generally more transactional and time-specific. A typical broker:
- accepts and carries out orders to buy and sell investments;
- gives recommendations to buy, sell, or hold a specific investment; and
- may agree to periodically monitor investments in some accounts.
Advisers provide services that are generally more focused on your portfolio or account over time. A typical adviser:
- gives ongoing advice about your investments – whether to buy, sell, or hold a specific investment;
- provides ongoing monitoring of how your investments are doing; and
- manages some accounts (called discretionary accounts) by making trades for you.
What are the different fees that brokers and advisers charge?
The fees you pay will depend on your agreement with the broker or adviser.
Typically, you pay a broker a fee called a commission or markup every time you buy or sell an investment. You may pay other fees and costs related to services and investments. From a cost perspective, you may prefer a transaction‐based fee if you do not trade often or if you plan to buy and hold investments for longer periods of time.
Typically you pay an adviser an ongoing asset-based fee based on the total value of your account. You may pay other fees and costs related to services and investments. An asset‐based fee may cost more than a transaction‐based fee, but you may prefer an asset‐based fee if you want ongoing advice or want someone to make investment decisions for you. You may prefer a wrap fee program if you prefer the certainty of a single fee for advisory services and commissions.
How do I check out a firm or an individual?
Always check the background of any firm or individual to make sure they are licensed. You can check out any firm or financial professional by using our “Check Out Your Investment Professional” search tool above.
To begin your search, select “firm” or “individual” on the far left hand side and then type in the name of the firm or individual. If you have questions about the search tool, you can read our Investor Bulletin.
How do I find a relationship summary?
How do I find a firm’s or individual’s disciplinary history?
You can find a firm’s or individual’s disciplinary history using our “Check Out Your Investment Professional” search tool above. To begin your search, select “firm” or “individual” on the far left hand side and then type in the name of the firm or individual. If the words “Disclosure Reported” appear when you find the name, the individual or firm has disciplinary history.
For individuals, click on the button for “Get Full Report.” You can find the disciplinary history under the heading “Disclosures.” Their firms may also have brochures available for you to review.
For firms, click on the button for “Get Details.” For a brokerage firm, you can find the disciplinary history under the heading “Disclosures.” For an advisory firm, click on the “Part 2 Brochures” button and go to the “Disciplinary Information.” For dual registrants, you should check out both.
How do I submit complaints or questions to the SEC?
If you have a problem with your investments, investment account, or a financial professional, use our investor complaint form to provide us your information.
How can I learn more?
Check out the rest of the SEC’s website for individual investors, Investor.gov. It has information on getting started, helpful financial tools and calculators, information on investment products, links to our investor alerts and bulletins, and additional resources for groups like teachers and the military.