Clear Money Guide
What this guide covers
A quick view of the questions and evidence developed below.
Updated July 1, 2026.
Short answer (2026): You can learn most of what matters about an advisory firm’s fees and conflicts by skimming seven lines in its Form ADV Part 2A brochure. Start with fees, conflicts, disciplinary history, custody, and compensation, then confirm fiduciary vs suitability status in writing before an intro call.
Where to get the ADV (fast)
- Go to the SEC’s public Adviser search (IAPD) and enter the firm’s legal name.
- Open the firm profile → Part 2 Brochures → download Part 2A (and Wrap Brochure if they offer one).
- Open the PDF and use Ctrl/Cmd + F with the tokens listed below.
Use this flat-fee fiduciary checklist and scripts when you request the brochure.
First: which document are you holding?
The seven lines below are numbered for a Part 2A firm brochure. Two things on the cover page of the file you downloaded decide whether those numbers land where you expect.
- A firm may file more than one brochure. Form ADV’s instructions permit it, and say what it costs you: “If you offer substantially different types of advisory services, you may opt to prepare separate brochures” — and “Each brochure may omit information that does not apply to the advisory services and fees it describes.” (Instructions for Part 2A, instruction 9). The rule allows the same structure in its own words: “If you provide substantially different advisory services to different clients, you may provide them with different brochures” (17 CFR 275.204-3(e)). So check how many brochures the firm has on file before you read one; the one you opened may not be the one that governs your account.
- If it is a wrap programme, the item numbers move. The brochure a wrap-fee sponsor owes you “must be a wrap fee program brochure containing all the information required by Part 2A, Appendix 1 of Form ADV” (17 CFR 275.204-3(d)(1)). In Appendix 1 the headings run Item 4 Services, Fees and Compensation, then Item 5 Account Requirements and Types of Clients. Every instruction that sends you to Item 5 for fees — including line 1 below — is Part 2A advice, and in a wrap brochure it lands on the account minimums instead. What the wrap fee program brochure has to tell you.
- Ctrl-F works because the filing format requires it. “You must file your brochure(s) (and amendments) through the IARD system using the text-searchable Adobe Portable Document Format” (General Instructions for Part 2, instruction 5). If text selection does not work in your copy, you are not reading the filed document.
7 lines that reveal fees & conflicts (what to CTRL/Cmd+F)
1) “Item 5 — Fees and Compensation” (your core fee schedule)
- Look for: exact breakpoints for AUM tiers, whether they offer flat or hourly, billing frequency (monthly/quarterly, in advance or arrears), and minimums.
- Good: clear tier table; examples; flat/hourly option; billing in arrears.
- Red flags: vague “fees vary”; billing significantly in advance without refund policy; mandatory add-ons.
Where to look: in the firm’s Form ADV Part 2A brochure, go to Item 5 — Fees and Compensation. The fee schedule is normally the first block under that heading; billing frequency, whether you are billed in advance or in arrears, and the refund policy are in the paragraphs right after it.
2) “other fees”, “platform”, or “overlay” (the add-ons)
- Look for: statements that you’ll also pay fund/ETF expense ratios, custodian/platform/overlay fees, or transaction costs.
- Good: explicit disclosure of these costs with typical ranges.
- Red flags: hidden platform/overlay fees or revenue-sharing tied to your assets.
Tip: Compare these to your numbers in the AUM Fee Calculator for an all-in view.
3) “Item 12 — Brokerage Practices” (who gets your trades & why)
- Look for: best-execution policy, soft dollars, directed brokerage, and any incentives to use a particular custodian.
- Good: explains trade-offs, monitors execution quality, minimizes conflicts.
- Red flags: benefits (research, tech credits) that the firm receives in exchange for your business.
Where to look: in the same brochure, go to Item 12 — Brokerage Practices. Soft-dollar arrangements are disclosed there, usually under a subheading about research or other products and services the firm receives from brokers.
4) “Item 14 — Client Referrals and Other Compensation” (who pays whom)
- Look for: referral fees paid to/received from other parties, solicitor arrangements, revenue sharing.
- Good: plain-English description; how conflicts are mitigated; whether this affects your fee.
- Red flags: pay-to-play style arrangements or incentives to recommend particular products.
5) “Item 10 — Other Financial Industry Activities and Affiliations”
- Look for: affiliations with broker-dealers, insurance agencies, or related advisers.
- Good: transparent statement that planning is fee-only with no product commissions.
- Red flags: insurance/broker ties that create incentives to sell proprietary or high-commission products.
6) “Item 15 — Custody” and billing language
- Look for: whether the firm debits fees from your account; any advance billing; surprise exam if they have custody.
- Good: fees debited with clear invoices; no custody beyond fee deduction.
- Red flags: broad custody (e.g., bill in advance, hold client funds) without robust controls.
7) “Item 9 — Disciplinary Information” (must-read)
- Look for: any disciplinary events for the firm or management personnel.
- Good: “No legal or disciplinary events to disclose.”
- Red flags: any disclosures—read them fully and ask questions.
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Find-it-fast tokens (paste into Ctrl/Cmd+F)
Item 5 · fees and compensation · tier · breakpoint · expense ratio · platform · overlay · Item 12 · soft dollar · directed brokerage · Item 14 · solicitor · referral · Item 10 · insurance · affiliation · Item 15 · custody · in advance · Item 9
Copy-paste email script (ask for the receipts)
Subject: Fee schedule, conflicts, and service details
Hi [Advisor] — before I decide, could you please send:
- The pages of your Form ADV Part 2A that list services, fee breakpoints, and any platform/overlay fees (Item 5).
- Your Brokerage Practices and Referrals/Other Compensation disclosures (Items 12 & 14).
- A one-page service calendar or meeting cadence (deliverables & SLAs), plus the ADV/CRS request email if you need the documents in writing.
I’m comparing this to a flat-fee quote and will decide this week. Thanks!
What to do with the numbers (flat vs AUM)
- Enter the tiers and any platform fee into the AUM Fee Calculator to see the all-in annual cost.
- If AUM looks high at your portfolio size, price a flat-fee engagement or a few hourly sessions.
- Use our negotiation scripts to ask for a lower tier or a fee cap.
Related reads
- AUM Fees Explained · How Much Does a Financial Advisor Cost?
- What’s a Service Calendar? Real Examples
- Questions to Ask a Financial Advisor
- Find a Financial Advisor (Hub)
Education only; not investment or tax advice. Always read the current Form ADV and confirm scope, fees, and conflicts in writing.