On April 18, 2018, the Securities and Exchange Commission (SEC) released a proposed Form CRS Relationship Summary that aims to increase clarity of investment professionals’ business models for investors. Form CRS is a hypothetical 4-page disclosure document that highlights the differences between broker dealers and registered investment advisors.

SEC Chairman Jay Clayton has set a high standard for Reg BI and Form CRS. He has said they should match reasonable investor expectations, maintain choice, address investor confusion, and offer “clear answers.” Does Form CRS meet this standard?

The SEC’s investor roundtables suggest the answer is, “no”. Even highly educated investors with careers in the financial, legal, and writing professions say the language in Form CRS is “poorly written,” “ambiguous,” and “need[s] more clarity.” Lawyers have difficulty making sense of it.

Assistant Director to the SEC’s Investment Adviser Regulation Office, Sara Cortes says, “[Y]ou need to tell people about [your conflict], and you need to tell people about it in a way…that’s sufficient that they can understand it.”1 41% of investors who spoke at the largest Investor Roundtable expressed dissatisfaction, views suggesting that Form CRS did not meet this standard. This whitepaper contains excerpts from all six roundtables of ordinary investors objecting to how Form CRS is written.

Download the full copy of the whitepaper here, or below.