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Form ADV - Ignore it at your peril

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  • Form ADV - Ignore it at your peril

    If you're a forum reader, but don't cross over to the blog, I thought you might be interested to know that WCI posted one of my articles today, link here. It's a little dry, but on a very important and overlooked topic, the Form ADV that is required to be filed online by all financial advisors who have anything to do with investing your money. If you are shopping for a financial advisor or use a financial advisor, you really ought to read this article.
    Our passion is protecting clients and others from predatory and ignorant advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

  • #2
    Nice article. Thank you. From the firm I've been using:

    ADV, Part 2A, Item 5:

    "Our firm and representatives have a financial incentive to recommend or select share classes that have higher expense ratios because such share classes generally result in higher compensation."



    • #3
      I just created a new thread on the ADV without seeing this thread.  Reposting here where it's more appropriate.  Johanna, you saved me thousands a year.


      There was a great WCI guest post about checking SEC filings for your advisor. I checked their form ADV, and found that they may negotiate fees. Nothing else hinky, and my planner had good qualifications, and they use good funds. Overall I was pleased with them, except they were pricey.

      I was paying a 1% stock 0.5% bond AUM structure which was changed to 0.9% flat fee (to avoid perception of asset allocation bias).

      The SEC filing showed that they negotiate fees.  So I called, and said I was thinking of leaving to do my own planning vs wondered if they do hourly rate planning. Turns out they do.  It’ll likely be sub-$1000/yr (as we have several years of relationship underway).

      The other thing I found out: you can only get DFA funds via an advisor.  But if you leave that advisor, you can keep your DFA funds – you just can’t add to those positions.  Before learning that, taxable gains was going to potentially keep me there with the hefty AUM fee.


      Enjoy – worth a try with whoever you use.


      • #4
        I recently had a relative ask me about their adviser. Having read Johanna's article when it was first posted, I pulled up the Form ADV and found things much worse than I anticipated.  I think that was the clincher in getting my relative to make a move.  So, thanks for the article, Johanna!