Study guide
17.3 Client Agreements & Disclosure
Series 65 Uniform Investment Adviser Law
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1 Introduction
About the Series 65 How to Use This Guide
2 Chapter 1: Economic Factors & Business Cycles
1.1 Business Cycles 1.2 Monetary Policy 1.3 Fiscal Policy 1.4 Inflation & Deflation 1.5 Interest Rates & Yield Curves 1.6 Global Economic Factors
3 Chapter 2: Financial Reporting & Analytical Methods
2.1 Financial Statements Overview 2.2 Accounting Fundamentals 2.3 SEC Filings & Annual Reports 2.4 Financial Ratios 2.5 Time Value of Money 2.6 IRR and NPV 2.7 Descriptive Statistics
4 Chapter 3: Types of Risk
3.1 Systematic (Market) Risk 3.2 Unsystematic (Company-Specific) Risk 3.3 Interest Rate & Reinvestment Risk 3.4 Inflation & Currency Risk 3.5 Liquidity Risk & Opportunity Cost 3.6 Risk Measurement & Portfolio Theory
5 Chapter 4: Cash Equivalents & Fixed Income Securities
4.1 Cash & Cash Equivalents 4.2 Treasury Securities 4.3 Agency Securities 4.4 Corporate Bonds 4.5 Municipal Bonds 4.6 Bond Pricing & Yields
6 Chapter 5: Equity Securities
5.1 Common Stock 5.2 Preferred Stock 5.3 Shareholder Rights & Corporate Actions 5.4 Equity Valuation Methods 5.5 ADRs, REITs & Other Equity Securities
7 Chapter 6: Pooled Investments
6.1 Mutual Funds 6.2 Mutual Fund Costs & Fees 6.3 Exchange-Traded Funds (ETFs) 6.4 Closed-End Funds & UITs 6.5 Hedge Funds & Private Equity
8 Chapter 7: Derivatives, Alternative Investments & Insurance Products
7.1 Options Basics 7.2 Options Strategies 7.3 Alternative Investments 7.4 Annuities 7.5 Life Insurance Products
9 Chapter 8: Client Types & Profiles
8.1 Individual Clients 8.2 Business Entity Clients 8.3 Trusts & Estates 8.4 Accredited & Qualified Investors 8.5 Suitability & Know Your Customer
10 Chapter 9: Portfolio Theory & Capital Markets
9.1 Modern Portfolio Theory 9.2 Capital Asset Pricing Model (CAPM) 9.3 Efficient Market Hypothesis 9.4 Risk & Performance Measures 9.5 Asset Allocation
11 Chapter 10: Portfolio Management Strategies
10.1 Investment Styles 10.2 Portfolio Management Techniques 10.3 Fixed Income Strategies 10.4 Return Calculations
12 Chapter 11: Tax Considerations & Retirement Planning
11.1 Capital Gains & Investment Taxes 11.2 Retirement Plans Overview 11.3 Individual Retirement Accounts (IRAs) 11.4 Education Savings Plans 11.5 Distributions & RMDs
13 Chapter 12: ERISA, Special Accounts & Performance Measures
12.1 ERISA Requirements 12.2 Special Account Types 12.3 Performance Measures & Reporting 12.4 QDROs & Special Situations
14 Chapter 13: Regulation of Investment Advisers
13.1 Investment Advisers Act of 1940 13.2 Registration Requirements 13.3 Recordkeeping Requirements 13.4 Custody Requirements 13.5 Exempt Reporting Advisers
15 Chapter 14: Regulation of Investment Adviser Representatives
14.1 IAR Definition & Requirements 14.2 Registration & Post-Registration 14.3 IARs of Federal Covered Advisers
16 Chapter 15: Regulation of Broker-Dealers & Agents
15.1 Broker-Dealer Definition 15.2 Agent Registration 15.3 Regulation Best Interest
17 Chapter 16: Securities Registration & Exemptions
16.1 Uniform Securities Act 16.2 Securities Registration Methods 16.3 Exempt Securities 16.4 Exempt Transactions
18 Chapter 17: Communications & Client Relationships
17.1 Advertising Rules 17.2 Social Media & Electronic Communications 17.3 Client Agreements & Disclosure 17.4 Proxy Voting & Other Obligations
19 Chapter 18: Ethics & Fiduciary Obligations
18.1 Fiduciary Duties 18.2 Prohibited Practices 18.3 Senior & Vulnerable Adult Protection 18.4 AML & Compliance Programs
17.3 Client Agreements & Disclosure
Key Takeaways Explain This Topic AI
Advisory contracts cannot be assigned without client consent.
Form ADV Part 2A must be delivered before or at contract signing.
If the brochure has materially changed, deliver an update or summary to clients within 120 days of fiscal year-end.
Privacy notices are required at account opening and annually with exceptions.
Clients may opt out of sharing with non-affiliated third parties.
Last updated: October 2026
Investment advisers must establish proper relationships with clients through written agreements and provide required disclosures. The Form ADV is the primary disclosure document for investment advisers.
- Advisory Agreements
- Required Elements
Every investment advisory agreement should include:
- Element Description
- Services Provided Specific description of advisory services
- Fee Schedule How fees are calculated and billed
- Duration/Termination How long the contract lasts; termination procedures
- Investment Authority Whether discretionary or non-discretionary
- Custody Arrangements How and where client assets are held
- Assignment Provision Cannot assign without client consent
- Arbitration Clause If applicable, dispute resolution procedures
- Assignment of Contracts
Key Rule : An investment adviser cannot assign an advisory contract to another person without client consent.
What Constitutes Assignment?
- Direct sale of the advisory contract
- Change in controlling ownership of the adviser (more than 25%)
- Merger or reorganization changing control
What Does NOT Constitute Assignment?
- Internal reorganizations not changing control
- Adding new partners if control doesn't change
- Death or withdrawal of minority partner
- Form ADV—The Disclosure Document
Form ADV is the primary registration and disclosure document for investment advisers.
Form ADV Structure
- Part Purpose Audience
- Part 1A Registration information, AUM, employees Regulators (SEC/State)
- Part 1B State-specific information State regulators only
- Part 2A Firm Brochure—narrative disclosure Clients and prospects
- Part 2B Brochure Supplement—personnel info Clients and prospects
- Part 3 Form CRS (for dual registrants) Retail investors
- Form ADV Part 2A—Firm Brochure
The brochure must disclose in narrative form:
- Item Disclosure Required
- Advisory Business Types of services offered, types of clients
- Fees and Compensation Fee schedule, how fees are calculated and collected
- Performance-Based Fees If charged, how they work
- Types of Clients Minimum account size, if any
- Methods of Analysis Investment strategies and risk of loss
- Disciplinary Information Material disciplinary events
- Other Financial Industry Activities Broker-dealer registration, insurance licenses
- Code of Ethics Summary of ethical policies
- Brokerage Practices Best execution, soft dollars, directed brokerage
- Review of Accounts Frequency and nature of reviews
- Client Referrals Compensation arrangements for referrals
- Custody If adviser has custody, safeguards
- Investment Discretion If adviser has discretion, any limitations
- Voting Client Securities Proxy voting policies
- Financial Information Balance sheet if required
- Form ADV Part 2B—Brochure Supplement
For each supervised person providing investment advice:
- Name and business address
- Educational background and business experience (past 5 years)
- Disciplinary information
- Other business activities
- Additional compensation arrangements
- Supervision structure
- Delivery Requirements
- Timing Requirement
- Initial Delivery Before or at the time of entering advisory contract
Annual Update Within 120 days of fiscal year-end, if the brochure has materially changed (summary of material changes or full brochure)
- Material Changes Promptly upon material disciplinary events (Item 9)
- Upon Request Must provide current brochure within reasonable time
- Electronic Delivery
Form ADV may be delivered electronically if:
- Client consents (express or implied)
- Client has access to retrieve the document
- Delivery method provides reasonable assurance of receipt
- Privacy Notices (Regulation S-P)
- Initial Privacy Notice
Must be provided to clients at account opening:
- Categories of information collected
- How information may be shared
- Security procedures
- Opt-out procedures if sharing with non-affiliates
- Annual Privacy Notice
Must be delivered annually, UNLESS:
- No changes to privacy practices, AND
- No sharing with non-affiliated third parties (other than exceptions)
- Opt-Out Rights
Clients have the right to opt out of:
- Sharing nonpublic personal information with non-affiliated third parties
- Does NOT apply to sharing with affiliates or for servicing the account
- Safeguarding Customer Information
Advisers must adopt written policies to:
- Protect customer records and information
- Ensure security and confidentiality
- Protect against anticipated threats
- Guard against unauthorized access
On the Exam : Know the Form ADV delivery requirements: initial delivery before or at contract signing, annual summary of material changes within 120 days of fiscal year-end if the brochure has materially changed. Assignment of contracts requires client consent.
- Key Takeaways
- Advisory contracts cannot be assigned without client consent
- Form ADV Part 2A (brochure) must be delivered before/at contract signing
If the brochure has materially changed, deliver an update or summary to clients within 120 days of fiscal year-end
- Privacy notices required at account opening and annually (with exceptions)
- Clients may opt out of information sharing with non-affiliates