When should the Brochure be initially delivered to clients?

The correct response is that the Brochure should be initially delivered to clients before entering into the advisory contract. This timing is crucial because the Brochure serves as an important disclosure document that provides prospective clients with essential information about the advisory services being offered, including the firm's qualifications, fees, investment strategies, and potential conflicts of interest. Ensuring that clients receive this information prior to signing the advisory contract allows them to make informed decisions and consider whether the advisory relationship aligns with their financial needs and goals.

Delivering the Brochure before the contract also fulfills regulatory requirements, ensuring compliance with the Securities and Exchange Commission (SEC) and the Investment Advisers Act. This helps to establish transparency in the advisory process and fosters trust between the adviser and the client from the very beginning of their relationship.

In contrast, delivering the Brochure after the contract is signed or at any time during the advisory period does not align with the regulatory framework designed to protect clients and could potentially mislead them about the nature of the services they are agreeing to. Providing the Brochure once a year after the initial contract is also insufficient, as clients should be informed of relevant information prior to their commitment.