After all, for years people like me have been telling you that advisers have to disclose much more about themselves than stockbrokers do, so you can make better-informed decisions about their services and integrity.
As I’ve learned to my shock in recent weeks, however, that isn’t always true. In some ways, financial advisers have to disclose less than brokers do—and what they don’t tell you could hurt you.
That’s truer than ever given how the advisory business has boomed. More than 14,800 SEC-registered advisers managed over $128 trillion for 65 million clients at the end of last year. That’s up from 10,500 advisers running $55 trillion for under 20 million clients in 2012, according to ComplySci, a regulatory-compliance firm, and the Investment Adviser Association. (These dollar amounts include some double-counting across firms.)
What’s the potential problem? Consider Vantage Consulting Group, an investment adviser in Virginia Beach, Va., that manages more than $2 billion in assets, mostly for pension and profit-sharing plans but also for at least one wealthy individual, according to a regulatory filing.
Like all financial advisers registered with the Securities and Exchange Commission, Vantage is required to provide clients with a standardized disclosure form called an ADV brochure.
Vantage’s latest brochure,…
