Who Is a “Related Person” at an RIA?
Related persons commonly include affiliated broker-dealers, insurance agencies, law firms, or other businesses under common ownership with the RIA. Form ADV Part 1 requires firms to disclose these relationships in detail, and Form ADV Part 2 (the brochure) requires a plain-language explanation of any related person arrangements that could create a conflict — for example, an adviser who also owns an insurance agency and receives commissions for products sold to advisory clients.
The disclosure obligation exists because clients need to understand where an adviser’s incentives might not be purely aligned with their own interests.