Which document is crucial for client understanding of an adviser's business practices?

Form ADV Part 2A is a critical document for clients to understand an adviser's business practices because it provides detailed information about the adviser’s services, fees, investment strategies, and any potential conflicts of interest. This document serves as a plain-language brochure that outlines key information that clients need to make informed decisions about whether to engage with the adviser and how their financial needs will be met.

Unlike Form ADV Part 1, which includes technical and regulatory details primarily for regulators, Part 2A gives a user-friendly overview that is essential for client comprehension. The Form CRS, while also important in facilitating an understanding of the relationship between the adviser and the client, mainly emphasizes the nature of the relationship and services rather than a comprehensive business overview. Meanwhile, Form U4 pertains to the registration and disclosure of an individual adviser’s professional background, which, while valuable, does not directly inform clients about the adviser’s business practices. Thus, Part 2A stands out as the most relevant document for enhancing client understanding.