Investment Advisor's Act of 1940

Investment Advisor's Act of 1940

Legislation in the United States defining an investment adviser as a professional who provides advice on how to manage investments or makes investments on behalf of a client. Under amendments to the Investment Advisers Act, investment advisers with more than $25 million under management are required to register with the SEC. The act defines the liability of investment advisers and provides guidelines on the fees and commissions they may collect. Additionally, the Act provides certain anti-fraud provisions protecting investors from predatory advisers, even those not registered with the SEC. It is less formally known as the Advisers Act.