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Form ADV Part 1A Item 7A(8) · Answer type: yn · Item 7 - Financial Industry Affiliations
Item 7A(8) asks whether the investment adviser has a related person that operates as a banking or thrift institution: meaning affiliated companies under common ownership that provide traditional banking services like deposits, loans, mortgages, or other financial products.
A related person includes parent companies, subsidiaries, sister companies, or other entities under common ownership or control with the investment adviser. When an adviser has affiliated banking institutions, the organization can offer both investment advisory services and traditional banking products, creating opportunities for comprehensive financial relationships but also potential conflicts of interest.
These banking affiliations can create conflicts where the adviser might have incentives to recommend keeping cash in affiliated bank deposits rather than higher-yielding alternatives, promote affiliated loan products over potentially better external financing, or use banking relationships to influence investment decisions in ways that benefit the affiliated bank rather than the client.
A wealth management firm whose parent company also owns a bank, or an advisory firm that has a sister company providing banking services, would mark Yes. An independent advisory firm with no affiliated banking entities would mark No.
Yes
The adviser has related persons operating as banks or thrift institutions. This means clients might be offered or referred to banking products from affiliated entities, potentially creating conflicts between getting the best financial products and generating revenue for the adviser's affiliated companies.
No
The adviser does not have related persons operating as banking institutions. However, the adviser firm itself might still operate as a bank (which would appear in Item 6A(7)), or they might work with unaffiliated third-party banks for client banking needs.
7A(8) - Banking or thrift institution (Yes / No).
This checkbox is part of Item 7A, which covers financial industry affiliations and related person activities that could create conflicts of interest with the adviser's fiduciary duties.
Affiliated banks create conflicts where the adviser's recommendations about cash management, financing, or custody arrangements might be influenced by the profit potential for their related banking entities rather than solely by client interests. A Yes answer means you should understand these relationships and potential conflicts.
When an adviser has affiliated banks, they might recommend keeping cash in lower-yielding affiliated deposits, promote affiliated loan products even when external options might be better, use affiliated custody services that may not be optimal, or make investment decisions influenced by banking relationships rather than pure investment merit.
A Yes does not tell you what banking services the affiliates provide, whether the adviser actually refers clients to affiliated banks, what the costs and benefits are compared to alternatives, how the adviser manages conflicts between client interests and affiliate revenue, or whether affiliated banking services are required for advisory clients.
Check 6A(7) to distinguish an affiliated bank from banking activity by the adviser itself. If client assets or services involve the affiliate, identify the bank, account terms, fees, and any referral or revenue-sharing payment.
Yes
The adviser reports having affiliated banking institutions. On the firm's Best Investors ADV panel, review Item 9 custody disclosures to see if affiliated banks custody client assets, check 6A(7) to see if the adviser itself also operates as a bank, and examine 8H and 8I referral compensation to see if there are financial incentives for banking referrals.
Also review Schedule A for details about the specific affiliated banking entities and their relationships. Ask the firm directly about their affiliated banking services, whether clients are encouraged to use these services, and how they manage conflicts between investment advice and banking affiliate interests.
No
The adviser does not report affiliated banking institutions. However, check 6A(7) to see if the adviser firm itself operates as a bank, and review Item 9 custody arrangements to understand their third-party banking relationships for client asset custody.
Look at their cash management recommendations and financing guidance to understand how they handle these services without affiliated banking capabilities.