Under FINRA Reg BI, broker-dealers must provide retail customers with a standardized 2-page Form CRS (Customer Relationship Summary) at or before account opening, written in plain English, that discloses the firm’s relationship and services (brokerage vs. advisory), all fees and costs with examples of typical charges, material conflicts of interest including proprietary products and third-party compensation arrangements, and the applicable standard of conduct (best interest obligation for broker-dealers vs. fiduciary duty for investment advisers). Additional required disclosures include capacity notifications when the firm acts in different roles, written acknowledgment of disclosure receipt, annual delivery of updated Form CRS, and prompt notification of material changes, with all disclosures maintained as records and designed to ensure customers understand the nature of their relationship with the firm and any conflicts that could influence investment recommendations.
