iii. advice about the advantages of investing in securities versus other types of investments (e.g., coins or real estate) is advice about securities;
iv. providing a selective list of securities is advice about securities even if no advice is provided for any one security; and v. asset allocation advice is advice about securities.
Dan’s CRS For Personnel Capable Of Switching Hats:
We can act as both an investment advisor and a broker-dealer. If our role changes, you will receive a written notification before that change occurs stating what role we are changing and outlining the standards that apply.
At this time, our relationship with you is as [choose “an investment advisor” or “a broker-dealer” or “both as an investment advisor and as a broker-dealer” and include all of the language above that applies given this initial relationship.]
[When a change of role is contemplated, the notice should state that a change of role and standards is occurring. If the switch is to an advisory account, the notice should include the language above for advisory relationships. The notice for a switch to a brokerage account should include the language above for brokerage relationships.]
The “S” in CRS stands for summary, so each of my versions is short. This was not hard since many of the “key questions to ask” that the SEC put in its CRS are already required to be answered in an ADV brochure, making that section of the advisor CRS unnecessary.
Even though my version completely skips a discussion of brokerage conflicts of interest, I think it would be a much better form of consumer protection than the SEC’s version. My version gets right to the point about the nature of the relationship, which is the one item prospective customers and clients need to understand most.
Dan Moisand, CFP, has been featured as one of America’s top independent financial advisors by Financial Planning, Financial Advisor, Investment Advisor, Investment News, Journal of Financial Planning, Accounting Today, Research, Wealth Manager, and Worth magazines. He practices in Melbourne, Fla. You can reach him at www.moisandfitzgerald.com.