A plain-language overview of the SEC disclosure landscape, SIPC coverage, and the fiduciary duties that govern registered advice in the United States.
The U.S. Securities and Exchange Commission requires registered investment advisers and broker-dealers to provide standardized disclosures describing their services, fees, conflicts of interest, and disciplinary history. These documents are designed to let investors compare providers on a like-for-like basis before engaging them.
Disclosure Review
Standardized investor information
$500,000
Standard SIPC protection per customer, per capacity, at a covered brokerage.
$250,000
Sub-limit of that coverage specifically applicable to uninvested cash balances.
The Securities Investor Protection Corporation protects customers of covered brokerage firms if the firm itself fails financially — it replaces missing securities and cash up to defined limits. SIPC coverage does not protect against investment losses caused by market movement, and it is not the same as FDIC deposit insurance, which applies to bank accounts rather than brokerage holdings.
Two standards govern most retail investment relationships in the United States, and understanding the difference matters when evaluating who you're working with.
Standard 01
Registered investment advisers are generally held to a fiduciary standard, requiring them to act in a client's best interest and to disclose material conflicts of interest at all times, not just at the point of a specific recommendation.
Standard 02
Broker-dealers operate under a "best interest" obligation for recommendations made at the time of a transaction, with disclosure requirements that differ from the continuous fiduciary duty owed by advisers.
Investor Checklist
Are you a fiduciary at all times, or only when making a recommendation?
How are you compensated, and do any products pay you more than others?
What disclosures are on file with the SEC or state regulator?