# Legal Essentials for an Independent RIA: Entity, Advisory Agreement and Insurance

As of Oct 20, 2026, the Advisers Act requires the advisory contract of an SEC-registered adviser to provide that it cannot be assigned without the client's consent, and the SEC's 2019 interpretation says an adviser's federal fiduciary duty may not be waived by contract.

As of: 2026-10-20
Address: https://advisoriq.com/practice/guides/legal-essentials-for-an-independent-ria/

## Facts

- Summary: Choosing an entity, the advisory agreement, Form ADV and Form CRS delivery, privacy, insurance, change of control and when to call securities counsel.
- Key facts: An SEC-registered adviser's contract must provide that it is not assigned without the client's consent.; An adviser's federal fiduciary duty may not be waived, though it applies in a manner that reflects the agreed scope of the relationship.; Deliver the Form ADV brochure before or at the time of entering an advisory contract, and annually within 120 days after fiscal year end.; Changing an SEC-registered adviser's form of organization or state of incorporation creates a new organization with its own registration obligations.

## Notes

- Educational, not legal, tax or investment advice.
- Practice management content is not eligible for CFP Board CE. CFP Board plans to allow up to five hours of it per cycle once its Q4 2027 changes take effect.

## Sources

- Legal Information Institute, Cornell Law School: 15 U.S.C. 80b-5 (Investment Advisers Act Section 205), investment advisory contracts, checked 2026-10-20: https://www.law.cornell.edu/uscode/text/15/80b-5
- U.S. Securities and Exchange Commission: Commission Interpretation Regarding Standard of Conduct for Investment Advisers, Release IA-5248, checked 2026-10-20: https://www.sec.gov/files/rules/interp/2019/ia-5248.pdf
- Legal Information Institute, Cornell Law School: 17 CFR 275.204-3, delivery of brochures and brochure supplements, checked 2026-10-20: https://www.law.cornell.edu/cfr/text/17/275.204-3
- U.S. Securities and Exchange Commission: Form ADV: General Instructions (SEC 1707), checked 2026-10-20: https://www.sec.gov/files/formadv-instructions.pdf
- U.S. Small Business Administration: Choose a business structure, checked 2026-10-20: https://www.sba.gov/business-guide/launch-your-business/choose-business-structure
- Legal Information Institute, Cornell Law School: 15 U.S.C. 80b-3a (Investment Advisers Act Section 203A), state and Federal responsibilities, checked 2026-10-20: https://www.law.cornell.edu/uscode/text/15/80b-3a
- U.S. Securities and Exchange Commission: Form ADV Part 2: Uniform Requirements for the Investment Adviser Brochure and Brochure Supplements (SEC 1707), checked 2026-10-20: https://www.sec.gov/files/formadv-part2.pdf
- Legal Information Institute, Cornell Law School: 17 CFR 275.206(4)-2, custody of funds or securities of clients by investment advisers, checked 2026-10-20: https://www.law.cornell.edu/cfr/text/17/275.206(4)-2
- Legal Information Institute, Cornell Law School: 17 CFR 275.204-5, delivery of Form CRS, checked 2026-10-20: https://www.law.cornell.edu/cfr/text/17/275.204-5
- U.S. Securities and Exchange Commission: Fact Sheet: Final Rules, Enhancements to Regulation S-P, checked 2026-10-20: https://www.sec.gov/files/34-100155-fact-sheet.pdf
- Legal Information Institute, Cornell Law School: 15 U.S.C. 80b-2 (Investment Advisers Act Section 202), definitions, checked 2026-10-20: https://www.law.cornell.edu/uscode/text/15/80b-2
- Legal Information Institute, Cornell Law School: 17 CFR 275.202(a)(1)-1, certain transactions not deemed assignments, checked 2026-10-20: https://www.law.cornell.edu/cfr/text/17/275.202(a)(1)-1
- NASAA: Cybersecurity Checklist for Investment Advisers (guidance), checked 2026-10-20: https://www.nasaa.org/wp-content/uploads/2020/04/Cybersecurity-Checklist-Guidance-3-19-20.pdf
- U.S. Securities and Exchange Commission, Division of Examinations: Risk Alert: Observations from Examinations of Newly-Registered Advisers, checked 2026-10-20: https://www.sec.gov/files/risk-alert-newly-registered-ias-032723.pdf
- Legal Information Institute, Cornell Law School: 17 CFR 275.206(4)-1, investment adviser marketing (the Marketing Rule), checked 2026-10-20: https://www.law.cornell.edu/cfr/text/17/275.206(4)-1
- U.S. Securities and Exchange Commission: Enhancements to Regulation S-P: A Small Entity Compliance Guide, checked 2026-10-20: https://www.sec.gov/files/rules/final/2024/regulation-s-p-small-entity-compliance-guide.pdf

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AdvisorIQ, as of 2026-10-20. https://advisoriq.com/practice/guides/legal-essentials-for-an-independent-ria/

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