DFI-Sec 5.05(2)(d)(d) Fails to disclose, in substance, the term of the advisory agreement, the fee to be charged by the adviser, the formula for computing the advisory fee, the formula for computing the amount of prepaid fee to be returned in the event of contract termination or non-performance, and whether the contract grants discretionary power to the adviser.

DFI-Sec 5.05(3)(3) Subsection (2) (a) shall not prohibit an investment advisory contract which provides for compensation based upon the total value of a fund averaged over a definite period, or as of definite dates or taken as of a definite date. “Assignment,” as used in sub. (2) (b) includes any direct or indirect transfer or hypothecation of an investment advisory contract by the assignor or of a controlling block of the assignor’s outstanding voting securities by a security holder of the assignor; but, if the investment adviser is a partnership, no assignment of an investment advisory contract is considered to result from the death or withdrawal of a minority of the members of the investment adviser having only a minority interest in the business of the investment adviser, or from the admission to the investment advisor of one or more members who, after admission, will be only a minority of the members and will have only a minority interest in the business. As used in sub. (2), “investment advisory contract” means any contract or agreement whereby a person agrees to act as investment adviser or to manage any investment or trading account for a person other than persons specified under s. 551.403 (2), Stats., or s. DFI-Sec 5.12.

DFI-Sec 5.05(4)(4) An investment adviser shall not enter any contract with a client if the contract contains any condition, stipulation or provision binding the client to waive any rights under ch. 551, Stats., or any rule or order thereunder. Any such condition, stipulation or provision is void.

DFI-Sec 5.05(5)(5) No registered investment adviser may enter into, extend or renew any investment advisory contract with a client in this state unless the contract is in writing and a copy of the contract is given to the client within 20 days after the execution of the contract.

DFI-Sec 5.05(6)(6) Each investment adviser who renders account supervisory or management services shall provide at least annually to each Wisconsin client a written summary of the client’s account which includes information setting forth the name, quantity and market value of each security under management, and the total value of cash and securities under management.

DFI-Sec 5.05(7)(7) Every registered investment adviser shall employ at its principal office or designated office of supervision in accordance with s. DFI-Sec 5.03 (1), at least one person designated in writing on the form prescribed in s. DFI-Sec 9.01 (1) (b) and filed with the division to act in a supervisory capacity who is registered as an investment adviser representative in this state and has satisfied the supervisory examination requirement in s. DFI-Sec 5.01 (5). If a registered investment adviser is not in compliance with the requirements of this paragraph, it has 45 days from the first date of noncompliance to meet the requirements of this paragraph.

DFI-Sec 5.05(8)(a)(a) Unless otherwise provided in this subsection, each investment adviser shall furnish to each client and prospective client a firm brochure and one or more supplements as required by this subsection. The brochure and any required supplement shall contain all information required by Part 2 of Form ADV and such other information as the division may require.

DFI-Sec 5.05(8)(b)1.1. Each investment adviser shall furnish the current brochure required by this section, and the current brochure supplement for each investment adviser representative who will provide advisory services, to a client or prospective client.

DFI-Sec 5.05(8)(c)(c) Each investment adviser shall, at least once a year, without charge, furnish or offer in writing to furnish to each of its clients the current brochure and any current brochure supplements required by par. (a). If a client accepts the written offer, the investment adviser shall send to that client the current brochure and supplements not later than 7 days after the investment adviser is notified of the acceptance.

DFI-Sec 5.05(8)(d)(d) If the adviser is the general partner of a limited partnership, the manager of a limited liability company, or the trustee of a trust, then for purposes of this subsection, the investment adviser shall treat each of the partnership’s limited partners, the company’s members, or the trust’s beneficial owners as a separate client. For purposes of this subsection, a limited liability partnership or limited liability limited partnership is also considered to be a limited partnership.

DFI-Sec 5.05(8)(e)1.1. Each investment adviser that is a sponsor of a wrap fee program shall furnish to a client or prospective client in lieu of the brochure required in par. (b), a wrap fee brochure containing all information required by Form ADV. All information in a wrap fee brochure shall be limited to information applicable to wrap fee programs that the investment adviser sponsors.

DFI-Sec 5.05(8)(e)2.2. An investment adviser is not required to offer or furnish the wrap fee brochure if another sponsor of the wrap fee program offers or furnishes to the client or prospective client of the wrap fee program a wrap fee program brochure containing all the information that the investment adviser’s wrap fee program brochure must contain.

DFI-Sec 5.05(8)(f)(f) Each investment adviser shall amend its brochure and any brochure supplement and deliver the amendments to clients not more than 30 days from the date that the information contained in the brochure or brochure supplement becomes materially inaccurate. The investment adviser shall comply with the instructions to Part 2 of Form ADV regarding updating and delivery.

DFI-Sec 5.05(8)(g)(g) Each investment adviser that renders substantially different types of investment advisory services to different clients may provide them with different brochures, provided that each client receives all applicable information about services and fees. The brochure furnished to a client may omit any information required by Part 2 of Form ADV if such information is applicable to only a type of investment advisory service or fee that is not rendered or charged, or proposed to be rendered or charged, to that client or prospective client.

DFI-Sec 5.05(8)(h)(h) Nothing in this subsection shall relieve any investment adviser from any obligation pursuant to any provision of ch. 551, Stats., or other federal or state law to disclose any information to its clients or prospective clients not specifically required by this rule.

DFI-Sec 5.05(9)(9) Each investment adviser that participates in a wrap fee arrangement with a broker-dealer shall disclose to each client under the arrangement the portion of the wrap fee that is attributable to advisory services. This requirement may be satisfied if the information is contained in the brochure provided to the client either by the investment adviser or the sponsor of the wrap fee arrangement.