What Financial Advisors Are Required to Disclose (And What They're Not)

Kimberly Green | 2026-04-13

What Financial Advisors Are Required to Disclose (And What They're Not) What Financial Advisors Are Required to Disclose (And What They're Not) Not all financial advisors play by the same rulebook. Your advisor might be a fiduciary legally bound to disclose conflicts of interest, or they might operate under a looser suitability standard that lets them hide the specifics of what they earn from recommending a product. This gap between what advisors must reveal and what they choose to hide is the difference between protecting your interests and protecting their commissions. Here's what you need to know to find advisors with nothing to hide. Form ADV Disclosure: Who's Required and Who Isn't Registered Investment Advisors (RIAs) are fiduciaries. They're required to disclose their fees, conflicts of interest, and any disciplinary history in a document called Form ADV. You have a right to this document. Before your first meeting, ask for it in writing. Broker-dealers play by different rules. They must recommend investments that are "suitable" for you, but the suitability standard doesn't require the same level of conflict disclosure that fiduciaries face. The gap is real: An RIA must tell you if recommending Product A makes them more money than Product B. A broker-dealer can take the commission and keep those specifics private. What's Inside Form ADV (And Why It Matters) Form ADV is the SEC's mandatory disclosure form for registered investment advisors. It's not optional. It's not a summary. It lists: How they get paid (flat fees, hourly rates, assets under management percentage) Conflicts of interest Previous disciplinary actions and regulatory sanctions Key personnel and their credentials Services offered and strategies used Asking for Form ADV in writing isn't aggressive. It's their legal obligation. If an advisor hesitates or makes it difficult, they're showing you something. The Commission Problem: What You'll Never See Commission-based advisors don't have to tell you how much they personally earn from the specific products they recommend. You might know they operate on commission, but the exact dollar amount they pocket from steering you toward Fund X instead of Fund Y? That stays hidden. This isn't a loophole for all advisors. Fiduciary RIAs must disclose material conflicts. But broker-dealers and insurance-licensed advisors operating under the suitability standard face a lower bar. Ask your advisor directly: "What do you earn if I buy this product?" If they can't or won't give you a number, you're working blind. FINRA BrokerCheck: The Free Advisor...