NASAA Brochure Rule
The NASAA Model Rule on Brochure Delivery requires state-registered investment advisors to provide clients and prospective clients with a written disclosure document — commonly known as the firm brochure (Part 2A of Form ADV) and a brochure supplement for each supervised person providing advisory services. This rule ensures that clients receive meaningful information about the advisor's business, fees, conflicts of interest, and disciplinary history before or at the time of entering into an advisory relationship.
Key Requirements
Firm Brochure (Part 2A)
Advisors must prepare a firm brochure in narrative format covering advisory services, fee schedules, types of clients, methods of analysis, disciplinary information, and other material disclosures. The brochure must be written in plain language that clients can understand.
Brochure Supplement (Part 2B)
For each supervised person who provides advisory services to clients, the firm must prepare a brochure supplement disclosing educational background, business experience, disciplinary history, other business activities, and compensation arrangements.
Initial Delivery
The firm brochure must be delivered to prospective clients at least 48 hours before entering into an advisory contract, or at the time of entering the contract if the client has the right to terminate without penalty within five business days.
Annual Offer of Delivery
Each year, within 120 days of the end of the fiscal year, the firm must either deliver an updated brochure or offer in writing to deliver the current brochure to existing clients.
Material Change Updates
When there are material changes to the brochure, a summary of those changes must be provided to clients either as part of the updated brochure or as a separate document. Material changes include fee increases, new conflicts of interest, or disciplinary events.
Recordkeeping
Firms must retain copies of all brochures and supplements delivered to clients, along with records of delivery dates, for the period specified by the applicable books and records rule.
State Adoption Status
Adoption of NASAA model rules varies by state. Some states adopt the model rule directly, while others have their own rules covering the same requirements.
Visit the State Adoption Tracker for a complete per-state breakdown. Data sourced from NASAA model rule matrix and NV 2024 Legislative Survey. Last verified March 2026.
Common Violations
Avoid these frequently cited deficiencies during state examinations.
Stale or Outdated Brochures
Failing to update the brochure to reflect changes in fees, services, personnel, or disciplinary history. Examiners regularly check whether the brochure on file matches the firm's current operations.
Missing or Incomplete Supplements
Not preparing brochure supplements for all supervised persons who provide investment advice, or omitting required disclosure items from existing supplements.
Late or Missing Annual Updates
Not delivering updated brochures or the annual offer of delivery within the 120-day window after fiscal year end.
Insufficient Conflict of Interest Disclosure
Failing to clearly disclose conflicts of interest such as revenue sharing, referral fees, affiliated products, or dual registration in the firm brochure.
Best Practices
Frequently Asked Questions
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