Form ADV Part 2B – also known as the brochure supplement – is a critical disclosure document for registered investment adviser (RIA) firms. While Part 2A (the firm brochure) outlines your firm’s services, fees, and conflicts, Part 2B zooms in on the individuals who actually provide investment advice to clients. In essence, it’s a resume-style disclosure for each advisory representative, detailing their background, qualifications, and any potential conflicts. Regulators emphasize that these disclosures must be written in plain English and kept meaningful, clear, and free of boilerplate, so clients can truly understand who is managing their money. This 2025 guide for compliance and RIA leaders covers what Form ADV Part 2B is, who needs it, required content, recent exam trends, and best practices to keep your firm compliant.
What Is Form ADV Part 2B and Who Needs to Deliver It?
Form ADV Part 2B provides required information about each individual adviser (supervised person) who interacts with clients (or has discretionary authority). According to the SEC’s instructions, you must prepare a Part 2B for any supervised person who (i) formulates investment advice and has direct client contact, or (ii) has discretionary authority over client assets even without direct client contact (see the SEC’s Form ADV Part 2B instructions). Note: no supplement is required for impersonal advice clients; for supervised persons who don’t interact or have discretion under certain team structures (especially where the firm uses a team structure), only the top few persons need supplements under SEC rule 2043(b).
Delivery timing: You must deliver the supplement by or at the time the client is first advised by that new person (or promptly thereafter if materially changed). If an existing client is introduced to a new adviser or team member, you must deliver the relevant brochure supplement. Unlike Part 2A, which generally must be offered annually, updates to Part 2B are event-driven: whenever information in the supplement becomes materially inaccurate (particularly new disciplinary history), you must update Part 2B as well; but also file and deliver ‘other-than-annual’ amendments whenever material changes occur.
Filing and recordkeeping: SEC-registered advisers do not file Part 2B with the SEC, but must maintain copies and make them available to examiners on request. State-registered advisers often must file their 2Bs via state or IARD systems and sometimes deliver them annually under state laws. Check each applicable state securities law or regulator guidance – state filing/delivery obligations can vary.
Required Content and Structure of a Brochure Supplement (Form ADV Part 2B)
Each adviser’s supplement must include, at a minimum, the following five key disclosure categories (as outlined in SEC instructions and Comply resources):
- Educational and Business Background
A narrative of the adviser’s education (schools, degrees, designations) and relevant business experience (typically at least the past ten years). Clients should be able to see who their adviser is and what qualifications they bring.
- Disciplinary History
Any legal or disciplinary events material to assessing the adviser’s integrity or ability to perform advisory services. This includes criminal convictions, civil injunctions, regulatory actions, or customer arbitration decisions. If there are no reportable events, state so explicitly (e.g. ‘No disciplinary history’). But also assess whether an older event, even beyond 10 years, remains materially relevant for disclosure under SEC guidance.
- Other Business Activities
A disclosure of any outside business activities or affiliations (e.g. insurance agent, real estate broker, board memberships) and the nature of any material conflicts those may pose.
- Additional Compensation
Any economic benefit the adviser receives from someone other than the client for providing advisory services (e.g. referral fees, commissions, product provider bonuses). Again, be specific about types and amounts.
- Supervision
An explanation of how the firm supervises that adviser (e.g. compliance reviews, oversight procedures) and contact information of the supervisor (or compliance officer) whom clients can contact with questions or concerns.
You may include additional disclosures (e.g. adviser’s date of birth, CRD number) if useful, but never omit required items. All disclosures must be current and consistent with the adviser’s firm brochure (Part 2A), Form U4, and other regulatory filings. In fact, mismatches across ADV parts are among the most common exam deficiencies (especially between 1A, 2A, and 2B)
2025 SEC and Exam Trends for Form ADV Part 2B
Consistency and Cross-Part Alignment
One persistent area of regulatory scrutiny is inconsistency among ADV parts. SEC and state examiners commonly compare Parts 1, 2A, 2B, and 3 (Form CRS) for alignment. Discrepancies in fees, services, conflicts, or disciplinary disclosures are flagged. The addition of Form CRS (Adv Part 3) heightens these risks, since now three documents must “tell the same story” about your firm and its advisers.
Emphasis on Plain English and Meaningful Disclosures
Both the SEC and state regulators have stressed that disclosures should be “clearly written, meaningful, and current”. Vague boilerplate language is a red flag. For example, an adviser supplement that merely says “may receive additional compensation” without detail is likely inadequate. Instead, specify sources and amounts, and address conflict mitigation. Examiners have flagged overuse of boilerplate as a deficiency, particularly when it undermines client comprehension.
Conflicts of Interest and Third-Party Payments
Conflicts remain a top exam focus. In 2025, SEC exam priorities continue to emphasize examining how advisers and personnel are compensated, including payments from third parties, revenue sharing, or affiliated entity fees. If an adviser has any such arrangement, it must be clearly disclosed in the supplement. Omitting or underdisclosing these arrangements is a frequent defect.
New Areas of Scrutiny: Technology, Outsourcing, and Innovation
Although Form ADV Part 2B itself has not been substantively revised recently, examiners are now probing how firms and advisers adapt to emerging technologies (e.g. AI tools, algorithmic models), outsourced services, and digital engagement. If an adviser has a role tied to technology or operations (e.g., model implementation, algorithm oversight), or receives incentives tied to proprietary tech, those factors may need disclosure. Being prepared to explain how oversight and supervision address these innovations is key.
Enforcement Spotlight on Disclosures
Late-2024 and early 2025 brought several SEC enforcement actions focused on deficient ADV disclosures, particularly omissions or misstatements of disciplinary history or conflicts. These actions underscore that promotional or dismissal of a disclosure as “immaterial” is risky. Always err on the side of more disclosure when doubt exists.
Best Practices for Preparing and Maintaining Form ADV Part 2B
To strengthen your compliance program and reduce exam risk, adopt these practices:
- Annual (or faster) Supplement Review
Even absent obvious changes, review each adviser’s supplement once a year (ideally in connection with your ADV amendment). Confirm credentials, employment, business activities, and supervisory protocols remain accurate. Document your review (e.g. internal checklist, sign-off). - Cross-Check Against U4 and Firm Brochure
Compare each supplement to the adviser’s U4 and the firm’s Part 2A (and any relevant states’ disclosures). Inconsistencies among those documents are a common exam finding. - Customize, Not Copy/Paste
Avoid generic language. Tailor disclosures to reflect each adviser’s actual conflicts, outside activities, or compensation. Specificity builds credibility. - Train Advisory Personnel
Require advisers to promptly report changes (e.g. new business ventures, licenses, or disciplinary matters). Use periodic compliance questionnaires and certifications to catch anything new. - Document Delivery and Retain Proof
Deliver supplements to clients at onboarding (or when a new adviser is assigned). Retain evidence (e.g. read receipts, signed acknowledgments, CRM logs). Some firms choose to send updated supplements annually to all clients even where not strictly required for 2B – and retain delivery proof (which helps in an exam). If you elect to send supplements more broadly (beyond required clients), document your policy and ensure consistency in how and when you deliver to avoid confusion or inadvertent omissions. - Use Compliance Tools/Workflows
Leverage compliance software or templates to standardize the process. Many systems allow advisers to input data and generate a formatted supplement, subject to compliance review. Such workflows reduce errors and streamline version control. - Maintain a Change Log
Keep a version history or change log for each adviser supplement, indicating what changed, when, and why. That helps during exams or internal audits to trace evolution of disclosures.
Integrating with Part 2A and Form CRS (Part 3)
Because clients often consider your firm’s disclosures holistically, it’s crucial that Part 2B fits within the broader ADV ecosystem:
- Part 2A (Firm Brochure): The firm brochure describes your services, fees, and conflicts at the firm level. If Part 2A discloses your firm may receive revenue sharing, referral fees, or maintain affiliates, then each adviser’s supplement (2B) should transparently explain whether and how the individual adviser participates or is affected by those structures. Your supplement should not surprise clients relative to what they already read in the firm brochure.
- Form CRS / ADV Part 3: All SEC-registered RIAs serving retail clients must deliver a short, plain-English client relationship summary (Form CRS or ADV Part 3) that highlights services, fees, conflicts, and disciplinary history. The information in Part 2B must be consistent with that in CRS. Where CRS references adviser-level disclosures (e.g. disciplinary events or conflicts), they must align with the supplements. See Comply’s discussion: Matching your RIA Firm’s Form ADV Parts 1, 2, and 3 (Form CRS) and also see the background on CRS in Comply’s ADV filings guide.
By aligning your disclosures across Part 2A, 2B, and CRS, you reduce the risk of clients detecting discrepancies -and examiners citing deficiencies.