When must investment advisers provide their clients with disclosure documents?

Providing clients with disclosure documents at the beginning of the adviser-client relationship is a critical requirement for investment advisers. This practice ensures that clients have all necessary information about the adviser’s qualifications, services, fees, and potential conflicts of interest before any investment decisions are made. The goal is to promote transparency and allow clients to make informed choices regarding their investments.

Investment advisers are required to deliver the Form ADV Part 2 (which includes information about the adviser’s business, services, fees, and disciplinary history) at the onset of the relationship. This not only fulfills regulatory obligations but also establishes a foundation of trust and communication with clients.

The other options do not align with regulatory requirements. For instance, providing documents only upon client request would not ensure that all clients receive the necessary information upfront, potentially leading to uninformed decision-making. Additionally, limiting disclosure to once a year during tax season does not account for the dynamic nature of the investment advisory relationship. Similarly, only providing documents when regulations change would not be sufficient, as clients should be fully informed from the start of the relationship, rather than in response to regulatory updates.