What Is Form CRS?

Form CRS, or Customer Relationship Summary, is a standardized disclosure document required by the U.S. Securities and Exchange Commission (SEC) that must be provided to retail investors by SEC-registered investment advisers, broker-dealers, and dual registrants. The purpose of Form CRS is to help individuals better understand the nature of their relationship with a financial professional, including the services offered, fees charged, legal obligations, conflicts of interest, and disciplinary history.

The SEC introduced Form CRS as part of Regulation Best Interest (Reg BI), which took effect on June 30, 2020. It is designed to promote transparency and comparability across firms, empowering investors to make more informed decisions when choosing a financial professional.

Purpose and Overview

Form CRS is intended to be a concise and user-friendly document, typically limited to two pages for standalone investment advisers or broker-dealers, and up to four pages for dual registrants. Its primary purpose is to help investors understand key differences between firms and professionals that provide investment advice or brokerage services.

The document is structured with clear headings and standardized questions, such as:

• “What investment services and advice can you provide me?”
• “What fees will I pay?”
• “What are your legal obligations to me when providing recommendations?”
• “Do you or your financial professionals have legal or disciplinary history?”

This format ensures that retail investors receive consistent and comparable information, regardless of the firm or business model. The form must also include “conversation starters”—questions that the investor can ask their advisor to prompt a more detailed discussion about topics like fees, services, or conflicts.

Who Must Provide Form CRS

Form CRS is required for SEC-registered investment advisers and broker-dealers that offer services to retail investors, which are defined as individuals who receive investment advice primarily for personal, family, or household purposes. Firms that only work with institutional clients are generally exempt from this requirement.

For firms that offer both brokerage and advisory services (dual registrants), the form must address each type of service separately, explaining the differences in services, compensation, and regulatory obligations.

Key Disclosures Required

Although the content of Form CRS is relatively concise, it is required to address several core areas:

Services and Advice Offered

This section describes the types of services the firm provides, such as portfolio management, financial planning, or trade execution. It also explains whether the firm offers discretionary or non-discretionary investment advice—meaning whether the firm makes investment decisions on the client’s behalf or requires client approval before taking action.

Fees, Costs, and Compensation

Form CRS must outline how the firm and its professionals are compensated. This includes fee structures such as hourly fees, flat fees, asset-based fees, commissions, or other transaction-based compensation. It should also highlight that fees and costs vary depending on the service and that they can impact the investor’s returns.

Legal Obligations and Standards of Conduct

Firms must clearly state the standard of care they are held to under the law. For example, investment advisers are fiduciaries and must act in the best interest of the client at all times. Broker-dealers, under Regulation Best Interest, must recommend investments that are in the best interest of the client but are not subject to a fiduciary standard.

Conflicts of Interest

This section outlines potential conflicts of interest that may arise from the firm’s business practices, such as revenue sharing, third-party payments, or incentives to promote certain investment products. The goal is to make investors aware of factors that could influence the firm’s recommendations.

Disciplinary History

Form CRS must disclose whether the firm or any of its financial professionals has a disciplinary history, including past regulatory, criminal, or civil actions. This encourages transparency and allows investors to assess the integrity of the professionals they may choose to work with.

Filing and Delivery Requirements

Firms must file Form CRS electronically through the SEC’s Investment Adviser Registration Depository (IARD) or Broker-Dealer Registration system (CRD), depending on their registration. The form must be updated and re-filed within 30 days of any material change.

Retail investors must receive the form:

• At the beginning of a relationship, before or at the time of entering into a contract
• When services change in a way that would make the form inaccurate
• Upon request

In addition to paper delivery, firms may deliver Form CRS electronically if the investor consents or if electronic delivery complies with SEC guidance.

Accessibility and Comparability

One of the SEC’s goals in creating Form CRS was to allow investors to compare firms more easily. Because the format and questions are standardized, it is possible to place multiple forms side by side to evaluate different providers. This comparability is especially helpful for individuals deciding between working with a broker-dealer, investment adviser, or dual registrant.

The SEC encourages investors to read Form CRS alongside other required disclosures, such as Form ADV Part 2 for investment advisers or Form BD for broker-dealers, for a more complete understanding of a firm’s operations.

The Bottom Line

Form CRS plays a central role in improving transparency between financial firms and retail investors. By presenting key information about services, fees, obligations, conflicts, and disciplinary history in a consistent and streamlined format, the form helps individuals understand their choices and engage more confidently with financial professionals. While it does not replace the need for detailed conversations or due diligence, it provides a clear starting point for making informed decisions about who to trust with financial advice.