Client Relationship Summary - Form CRS Requirements

Form CRS fails in practice for two reasons: firms can’t prove timely delivery, or the document drifts out of alignment with what the business actually does. The SEC’s standard is straightforward: a short, plain-English relationship summary delivered to retail investors at the right time, kept current, and filed with the SEC. The operational lift is in the plumbing around it: onboarding workflows, digital delivery and acknowledgments, supervision, and change management.

This requirement page is written for a Compliance Officer, CCO, or GRC lead who needs to convert the rule into execution. You’ll find: (1) the exact regulatory expectations you must build around, (2) a step-by-step implementation sequence you can hand to Operations and the business, (3) the evidence set exam staff typically ask for, and (4) common failure modes that create avoidable exam issues.

If you already have a Form CRS drafted, your fastest path to “exam-ready” is to map every retail investor entry point (web, call center, referral, branch, platform, wrap program) to a controlled delivery event, then enforce it with system blocks or documented supervisory checks, and retain timestamped proof.

Regulatory text

Operator standard (what the rule requires): Form CRS must be filed with the SEC and delivered to retail investors at or before entering into an investment advisory or brokerage relationship. The relationship summary must be written in plain English, presented in a standardized format, and limited to two pages (SEC Form CRS; 17 CFR 275.204-5).

What you must do with that text operationally:

1. File the Form CRS you actually use with retail investors with the SEC (17 CFR 275.204-5).
2. Deliver the same current version to each retail investor no later than the point the relationship is established (17 CFR 275.204-5).
3. Constrain content and layout to the SEC’s format, plain-English expectations, and page limit (SEC Form CRS).
4. Prevent misleading disclosure (no untrue statement of material fact and no material omission that makes statements misleading) through a review and approval control (17 CFR 275.204-5).

Plain-English interpretation (what the SEC expects you to prove)

You need to be able to show an examiner, with records, that:

• Every retail investor received the current Form CRS at the right time (before or at relationship start) (17 CFR 275.204-5).
• The Form CRS matches your real-world services, fees, conflicts, and disciplinary disclosures, and stays accurate as the business changes (SEC Form CRS; 17 CFR 275.204-5).
• The document is readable and standardized, not marketing copy or a mini-ADV, and it stays within the page constraint (SEC Form CRS).

Who it applies to (entity and operational context)

Covered entities:

• Registered Investment Advisers (RIAs) (17 CFR 275.204-5).
• Broker-dealers (SEC Form CRS).

Covered relationships and channels:

• Any workflow where you “enter into” an advisory or brokerage relationship with a retail investor (natural person or their representative) (17 CFR 275.204-5).
• Common trigger points include account opening, advisory agreement execution, enrollment in a managed account program, or moving from an institutional profile to a retail investor profile.

Practical scoping tip: Start with a retail investor inventory. If a person can sign, click-to-accept, open, fund, or otherwise activate services as a retail investor, that path needs a Form CRS delivery control.

What you actually need to do (step-by-step)

1) Build a “delivery trigger map” for retail investor entry points

Create a one-page matrix that lists:

• Relationship type (advisory, brokerage, dual registrant context if applicable)
• Channel (digital, branch, phone, referral, third-party platform)
• Trigger event (account open, contract execution, first trade, program enrollment)
• Delivery method (electronic, paper, link plus prompt, portal delivery)
• Proof captured (timestamp, email log, e-sign acknowledgment, mailing log)

Your goal is simple: no trigger event without a delivery event (17 CFR 275.204-5).

2) Standardize the Form CRS content and format control

Set a formal document standard that includes:

• Template locked to the SEC’s required structure and “plain English” constraints (SEC Form CRS).
• Page-limit guardrails embedded in the template (SEC Form CRS).
• A disclosure mapping file that ties each Form CRS statement back to the underlying source of truth (e.g., fee schedule, conflicts register, disciplinary disclosures, product/service catalog).

This mapping is what keeps you from publishing a Form CRS that conflicts with operations.

3) Implement an automated (or enforced) delivery workflow in onboarding

Minimum viable control set:

• System-enforced delivery step in the onboarding workflow before the account can be opened or contract finalized (17 CFR 275.204-5).
• If you cannot hard-block, require a supervisory review checkpoint with documented attestation and exception handling.
• Use a single “current version” repository so staff cannot send stale copies.

Common operational pattern: A CRM task fires when retail investor status is set, attaches the current Form CRS, requires client delivery confirmation, and logs an immutable timestamp.

4) File and version-control like a regulated disclosure (because it is)

Treat Form CRS as a controlled regulatory disclosure:

• Assign an owner (usually Compliance) and a maintainer (often Legal/Compliance Ops).
• Maintain version history, approvals, and effective dates.
• File the version you use and be able to show which version each retail investor received (17 CFR 275.204-5).

5) Create a material-change detection process tied to real business change events

The rule expects updating when information becomes materially inaccurate, so do not rely on “annual review” alone (17 CFR 275.204-5). Tie Form CRS review into:

• Fee schedule changes
• New products/services offered to retail investors
• Compensation arrangements and conflicts changes
• Disciplinary events or disclosures
• Changes to account minimums or service models

Control suggestion: A quarterly cross-functional certification (Compliance, Finance, Sales leadership, Operations) that either confirms “no material changes” or opens a tracked update ticket. This aligns with a practical cadence many firms use and supports timely updates (17 CFR 275.204-5).

6) Operationalize redistribution and “current version” distribution

After an update:

• Update the master repository (effective version).
• File the updated Form CRS with the SEC (17 CFR 275.204-5).
• Ensure new retail investors receive only the new version.
• For existing clients, follow your established delivery policy and document how and when you provide updated disclosures consistent with your supervisory model (17 CFR 275.204-5).

7) Test the control set (like an examiner would)

Run a delivery test across each channel:

• Sample recent retail investor onboardings.
• Verify delivery timestamp precedes or matches the relationship start event (17 CFR 275.204-5).
• Confirm the delivered PDF/version hash matches the filed version.
• Confirm staff cannot access outdated versions.

If you use Daydream for compliance operations, treat this as a repeatable control test: one workflow for sampling, one evidence packet format, and a single place to store delivery proofs and approvals so exams don’t turn into a scavenger hunt.

Required evidence and artifacts to retain

Keep an “exam packet” that you can regenerate on demand:

Document governance

• Current Form CRS (final) and prior versions with effective dates (SEC Form CRS; 17 CFR 275.204-5)
• Approval records (Compliance/Legal sign-off) (17 CFR 275.204-5)
• Plain-English/format checklist showing standardized format and page-limit compliance (SEC Form CRS)

Filing and distribution

• SEC filing confirmation for each version used (17 CFR 275.204-5)
• Distribution procedures (who sends, when, how, and exceptions) (17 CFR 275.204-5)
• Delivery logs: email logs, portal delivery receipts, e-sign acknowledgments, mailing logs, or CRM activity records showing date/time sent and version identifier (17 CFR 275.204-5)

Supervision and testing

• Channel-by-channel trigger map
• Exception log (missed delivery, late delivery, wrong version) with remediation steps
• Periodic review attestations and change tickets tied to business changes (17 CFR 275.204-5)

Common exam/audit questions and hangups

Expect variations of:

• “Show me, for this retail investor, the exact Form CRS delivered and the timestamp relative to account opening or contract execution.” (17 CFR 275.204-5)
• “How do you ensure the Form CRS in your onboarding portal is always the current filed version?” (17 CFR 275.204-5)
• “What is your process to identify material changes and update Form CRS?” (17 CFR 275.204-5)
• “Who reviews for accuracy and misleading statements, and what evidence do you keep?” (17 CFR 275.204-5)
• “How do you supervise paper delivery channels and third-party platform flows?” (17 CFR 275.204-5)

Hangups typically occur where Operations says “the system sends it,” but you can’t produce logs, or where Marketing updated language and the document no longer matches actual fees/conflicts.

Frequent implementation mistakes (and how to avoid them)

1. No clear definition of the “relationship start” event.
   Fix: define the trigger per channel (contract execution, account approval, first trade) and enforce delivery at that step (17 CFR 275.204-5).

2. Stale copies in shared drives or advisor desktops.
   Fix: one controlled repository; block local storage; disable printing of outdated versions where possible.

3. Delivery proof that doesn’t show version.
   Fix: embed a version/date in the footer and log the version ID in CRM delivery events.

4. Form CRS says one thing; actual practice differs.
   Fix: maintain a disclosure mapping to source documents and require functional owner sign-off for each section.

5. Updates treated as a rewrite project instead of a change-control workflow.
   Fix: use tickets, defined approvers, and a release checklist that includes SEC filing and controlled rollout (17 CFR 275.204-5).

Risk implications (why operators get nervous about this)

Form CRS is short, standardized, and easy for exam staff to test at scale: pick accounts, compare timestamps, compare versions, review for misleading statements (SEC Form CRS; 17 CFR 275.204-5). Control weakness here can cascade into broader concerns about supervision, disclosure governance, and whether your retail investor communications are reliable.

Practical execution plan (30/60/90-day)

First 30 days (stabilize and prove delivery)

• Inventory retail investor onboarding paths and define relationship-start triggers (17 CFR 275.204-5).
• Centralize the current Form CRS in a controlled repository; purge stale copies.
• Implement or tighten delivery logging so each delivery event captures timestamp and version ID (17 CFR 275.204-5).
• Create an exam-ready sample packet for a small set of recently onboarded retail investors.

Days 31–60 (governance and change control)

• Stand up the Form CRS disclosure mapping to fees, services, and conflicts sources (SEC Form CRS).
• Formalize approvals, versioning, and filing checklist steps (17 CFR 275.204-5).
• Add exception handling and remediation workflow (late/missed delivery, wrong version) (17 CFR 275.204-5).

Days 61–90 (monitoring, testing, and operational hardening)

• Run a channel-based control test; document results and fixes.
• Tie Form CRS review into business change events (fees, products, conflicts, disciplinary disclosures) (17 CFR 275.204-5).
• Establish periodic certifications from functional owners that Form CRS remains accurate or open change tickets for updates (17 CFR 275.204-5).

Frequently Asked Questions

Do we have to deliver Form CRS before the client signs the advisory agreement?

The requirement is delivery to retail investors “before or at the time of entering into” the relationship (17 CFR 275.204-5). Operationally, set the trigger to occur before signature or as part of the signature package, and retain timestamped proof.

What counts as evidence that Form CRS was delivered electronically?

Keep system-generated logs that show recipient, date/time, and the exact version delivered (17 CFR 275.204-5). If you only store “email sent” without the attachment/version identifier, exams often treat it as incomplete proof.

How do we handle multiple onboarding channels (branch, web, and third-party platforms)?

Build a trigger map by channel and enforce the same control outcome: delivery by the relationship-start event with auditable proof (17 CFR 275.204-5). Where you don’t control the platform, require contractual or procedural commitments plus reconciled delivery reporting.

What happens if we discover Form CRS is materially inaccurate?

Treat it as a change event: correct the content, file the updated version with the SEC, and ensure distribution switches to the new version with version control and documented approvals (17 CFR 275.204-5). Track the issue through remediation and document the decision on materiality.

Can Marketing edit the language to make it sound more persuasive?

Form CRS must be in plain English and follow the SEC’s standardized format, and it must not be misleading (SEC Form CRS; 17 CFR 275.204-5). Route any edits through Compliance approval and validate they still match actual practices, fees, and conflicts.

How often should we review Form CRS?

The rule expectation is updates when information becomes materially inaccurate, so reviews should be tied to business changes and supervised through a defined process (17 CFR 275.204-5). Many firms add a periodic certification cycle to catch slow drift even when no single change event is flagged.