Are you in sync with your financial professional?

Are you comfortable that the services your financial professional provides you are those that you expect?

Making sure that you are in sync with your financial service provider is the goal of Form CRS, the disclosure document that the U.S. Securities and Exchange Commission adopted in 2019.

Individual investors will be grateful to know that regulators are pursuing financial firms that are not meeting Form CRS rules.

The SEC recently announced actions against six investment advisers and six broker-dealers. Another 30 financial firms were pursued, and later settled, in 2021. (See the SEC’s Feb. 15 release at tinyurl.com/ya4e3bhu.)

Why do investors need Form CRS?

Without it, it is very difficult for an investor to understand how to assess brokers, advisers and the firms they work for.

With it, a “retail investor” (that’s you) is able to easily assess the services and conflicts of his or her own financial firm and to compare that firm to others.

After all, the CRS is user-friendly and just two pages long (four pages if the firm is a “dual registrant” — regulated as both a registered broker-dealer and an investment adviser).

If you are wondering if you ever received a CRS, the first CRS was due to be delivered to you in June or July of 2020. Some of the firms that have been pursued by the SEC failed to get the CRS to its customers until much later.

If you have not read your financial firm’s CRS, you can solve that problem by going online to the firm’s website. Each firm is required to post its CRS for you to access easily.

You can also find it by going to BrokerCheck (tinyurl.com/5b8edfsv), which is operated by FINRA, the Financial Industry Regulatory Authority. FINRA regulates the brokerage industry, but you can search for broker-dealers and investment advisers at BrokerCheck.

The CRS can also be called a Relationship Summary. For example, look at Vanguard’s CRS for its brokerage firm and its investment advisory firm at tinyurl.com/ye25uj6y.

Also look at Vanguard’s answers to “conversation starters” — questions that are embedded in the CRS for you to ask your financial professional. Vanguard’s answers for its brokerage services are at tinyurl.com/2p543s68, and the answers for its investment advisers are at tinyurl.com/zwxdwndy (personal adviser) and tinyurl.com/yckjvuf5 (robo-adviser).

I recommend that you spend some time with each set. Then, check out the firm you use. The goal is to compare and contrast firms.

In the latest set of SEC cases, the 12 firms, without admitting or denying the findings, agreed to be censured and to pay a civil penalty, with the amount ranging from $10,000 to $25,000, although one firm agreed to a civil penalty of $97,523.

In another case, a Georgia broker-dealer “filed its Form CRS and delivered Form CRS to its existing retail investor customers on March 30, 2021. Moreover, the Form CRS ... failed to include certain language and information specified in the Instructions to Form CRS and required by Rule 17a-14. On or about December 13, 2021, [the firm] filed an updated Form CRS with additional information and language ... and delivered [it] to existing retail investor customers on Dec. 17, 2021.” The firm agreed to pay a civil penalty of $10,000.

The reason to read your firm’s CRS is simple, quoting an SEC Investor Bulletin issued in August 2020 (tinyurl.com/dhf7c6up):

“It is important to make sure your financial professional provides the services you expect. In order to help you, the retail investor, understand the differences between brokers and advisers — including, for example, the services they offer and the fees they charge — SEC rules require them to provide you a [Form CRS].”

I am a strong supporter of understanding how to invest wisely. The foundational piece of knowledge is understanding the type of firm you engage to invest with. If you haven’t read your firm’s CRS, now is a good time to do that. In fact, I can’t think of a single good excuse to put that off.

If you would like to communicate about what you find, take a moment to complete this quick survey at tinyurl.com/2p9xzcjh or email me at readers@juliejason.com.

Julie Jason, JD, LLM, a personal money manager (Jackson, Grant of Stamford) and author, welcomes your questions/comments (readers@juliejason.com). Her awards include the 2021 Clarion Award, symbolizing excellence in clear, concise communications. Her latest book, a curated collection of her columns, is “Retire Securely: Insights on Money Management From an Award-Winning Financial Columnist.” To hear Julie speak, visit juliejason.com/events.