Client Confidentiality & Privacy
Client information stays confidential except with consent or as required by law.
What is Client Confidentiality & Privacy?
Regulation S-P requires a privacy notice at the start of the relationship and, generally, annually, and limits sharing of nonpublic personal information with nonaffiliated third parties. Disclosure without consent is allowed when required by law - for example, in response to a subpoena or a regulator's request.
Client Confidentiality & Privacy: a worked example
An adviser must refuse a client's adult child who calls asking about the parent's balance, absent authorization.
More terms in Ethics & Fiduciary Obligations
Form ADV Part 2 Brochure Delivery
Deliver 48 hours before the contract, or at signing with a 5-business-day exit.
Advisory Contract Requirements
Written, specific about fees, no assignment without consent, no waiver of rights.
Assignment of an Advisory Contract
Transferring a client contract requires the client's consent - including by change of control.
Performance-Based Fees & Qualified Clients
Allowed only for qualified clients: $1.4M with the adviser or $2.7M net worth (from June 29, 2026).
Prepaid Fees & Financial Requirements
Prepayment over $500, six months ahead, triggers net worth and balance sheet rules.
Custody
Holding, or having authority to obtain, client funds or securities.
Discretionary Authority
Deciding the asset, the amount, or buy versus sell - without asking first.
Third-Party Trading Authorization
Anyone other than the owner needs written authority to trade the account.