Updated August 18, 2026. Quick answer: if what you are being sold is a wrap fee programme — one bundled fee covering advice, trading and custody — then the document you are owed is not the ordinary firm brochure. It is a wrap fee program brochure, built to Form ADV Part 2A Appendix 1, and its items are numbered differently. The fee is in Item 4. Item 5 is account minimums. Every guide that tells you to read Item 5 for the fee — including, until you know this, most of the internet — is describing the other document, and in a wrap brochure it lands you on the eligibility rules instead. Appendix 1 also forces out one number the firm brochure never has to give you: how much of your fee is passed to the portfolio manager.
The one-line answer: in a wrap fee program brochure the fee is Item 4; in a Part 2A firm brochure the fee is Item 5. You can falsify this in ten seconds by opening either document and reading its own headings.
The numbering trap, first, because it is the whole page
Both documents are called a brochure. Both are Form ADV Part 2A. Both open with a cover page and a table of contents that looks familiar. And their item numbers do not line up.
| Item | In a Part 2A firm brochure | In an Appendix 1 wrap brochure |
|---|---|---|
| Item 4 | Advisory Business | Item 4 Services, Fees and Compensation — the fee lives here |
| Item 5 | Fees and Compensation — the fee lives here | Item 5 Account Requirements and Types of Clients — minimums, not fees |
| Item 7 | Types of Clients, including account minimums | — |
The two wrap headings above are quoted exactly as they are printed in Form ADV Part 2, Part 2A Appendix 1.
So a reader who has been told “the fee is always Item 5” opens a wrap brochure, reads Item 5, finds a minimum account size, and concludes the firm has not disclosed its fee. It has — one item earlier.
Which document you are actually owed
This is not a stylistic choice by the sponsor. The delivery rule, 17 CFR 275.204-3, requires the substitution: “If you are a sponsor of a wrap fee program, then the brochure that paragraph (b) of this section requires you to deliver to a client or prospective client of the wrap fee program 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)).
“Sponsor” is the firm that puts the programme together. If you are being sold into a wrap programme and you were handed the ordinary firm brochure, you have been given a document that is not the one the rule names for that programme. Asking for the wrap fee program brochure by that exact name is usually enough.
The number Appendix 1 forces out that a firm brochure never has to give
“Indicate the wrap fee charged for each program or, if fees vary according to a schedule, provide your fee schedule. Indicate whether fees are negotiable and identify the portion of the total fee, or the range of fees, paid to portfolio managers.” (Form ADV Part 2A Appendix 1, Item 4.A).
That last clause is the reason this document is worth chasing. In a bundled fee, the money is split between the sponsor and whoever actually manages the portfolio — and a wrap brochure has to identify the portion of the total fee, or the range of fees, paid to portfolio managers. Nothing in an ordinary Part 2A brochure requires that split. It is the closest thing in the disclosure regime to being told what you are paying for advice as distinct from what you are paying for everything else.
The sentence the sponsor has to write in its own words
“Explain that the program may cost the client more or less than purchasing such services separately and describe the factors that bear upon the relative cost of the program” (Form ADV Part 2A Appendix 1, Item 4.B).
A wrap brochure therefore contains, somewhere, the firm’s own acknowledgement that the bundle may cost more than buying the pieces separately, together with the factors that decide which way it falls. Find that passage and read the factors: they are the firm telling you, in writing, the conditions under which its own programme is the more expensive choice. Trading frequency is usually one of them — a bundled fee tends to reward an account that trades a lot and penalise one that sits still.
Knowing which document to ask for is the easy half.
If you are weighing a wrap programme against an ordinary managed account, the comparison is only as good as the people quoting it. The matching service below introduces you to advisers who pay to meet you — ask each of them which brochure governs what they are proposing.
Before you start, what actually happens. The form is run by Kapitalwise, our advisor-matching partner. Kapitalwise sends your details to advisers who pay for the introduction, so expect calls and texts. Clear Money Guide is paid when you submit the form, whether or not you ever hire anyone. This is free to you and there is no obligation to hire anyone.
The Kapitalwise form opens here — you stay on this page.
What happens when you press the button
It asks about nine questions — age, investable assets, location — then your name, email and phone number, and verifies the phone by text. Nothing loads and nothing reaches Kapitalwise until you press the button.
How to tell which brochure you are holding
Three checks, in order of speed.
- Read the cover. An Appendix 1 document normally says “wrap fee program brochure” on it, because that is what the rule calls it.
- Read the Item 4 heading. If Item 4 says “Item 4 Services, Fees and Compensation”, it is a wrap brochure. If Item 4 says “Advisory Business”, it is a firm brochure.
- Look for a portfolio-manager split. Only Appendix 1 requires it.
The fee schedule in a wrap brochure can be a year old too
The annual-amendment cycle applies here in the same way: a sponsor is not required to “update your wrap fee program brochure between annual amendments solely because your fee schedule has changed” (Form ADV, Instructions for Part 2A Appendix 1). So the wrap fee you are reading is what was filed, not necessarily what is quoted today. How current a filed fee schedule has to be covers the cycle in full, and the answer — ask for the current schedule in writing — is the same for both documents.
What our own fee research can and cannot tell you about wrap pricing
We read the fee disclosures of 176 SEC-registered advisers in their own Form ADV Part 2A filings and computed what advice costs. Wrap programmes are deliberately outside the scope of that measurement: the availability figures in State of Advisor Fees 2026 are computed only over firms whose primary programme is a non-wrap, assets-under-management programme. None of those percentages describe wrap pricing, and we do not extend them to it.
For the wrap-adjacent cost question we have looked at — what a unified managed account platform layers on — see UMA platform costs. For the ordinary case, what belongs in a fee schedule and what advice costs are the starting points, and the Part 2B supplement covers the person rather than the programme.