Investment Advisers Act

(redirected from Advisors Act)

Investment Advisers Act

Legislation passed in 1940 requiring financial advisers to register with the Securities and Exchange Commission. The measure was enacted to protect the public from fraud or misrepresentation by investment advisers.

Investment Advisers Act

Legislation in the United States defining an investment adviser as a person who provides professional advice on how to manage investments or makes investments on behalf of a client. Under amendments to the 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.
References in periodicals archive ?
The advisor said that the amendment in the Sindh advisors Act 2003 had also been approved and referred to the Sindh assembly for legislation.
Finally, there is the "duty of loyalty," which, as Rostad succinctly put it, "is the very heart of the fiduciary standard under the Advisors Act." The SEC instructed commenters in Part B, Section 1 to "assume that any rule under consideration would expressly impose certain disclosure requirements," including all material conflicts of interest.
1206, the "Access to Professional Health Insurance Advisors Act of 2011."
1206, the Access to Professional Health Insurance Advisors Act of 2011.
Under the legislation, the Investment Advisors Act would be amended to simply delete the current exclusion under that law for broker-dealers whose advice is incidental to the conduct of his or her business and who therefore receive no special compensation for such advice.
The advice must be provided by a "fiduciary adviser," which is defined as a registered investment adviser (under the Investment Advisors Act of 1940) or a bank, insurance company or broker-dealer (under the Securities Act of 1934).
The AICPA Personal Financial Planning (PFP) Executive Committee has been tracking the SEC's activities relating to its final rule, "Certain Broker-Dealers Deemed Not to Be Financial Advisers" (www.sec.gov/rules/ final/34-51523.pdf), which exempts certain fee-based broker-dealers from the provisions of the Investment Advisors Act of 1940.
It covers all significant statutory provisions, including the Security Exchange Act of 1934, the Investment Company Act of 1940, the Investment Advisors Act of 1940 and the privacy provisions of the Gramm--Leach--Bliley Act.
The first panel debated the scope of the Investment Advisors Act of 1940 (Act); among the participants was the AICPA's Director of Personal Financial Planning.
To close this gap, says Tittsworth, the IPA (specifically Section 913) should simply amend the Advisors Act to extend the current fiduciary obligation to broker-dealers.
(CPAs can find details on the SEC rules in section 275.206(4)-3, "Cash Payments for Client Solicitations," of the Investment Advisors Act of 1940.) According to Rob Stype, managing partner of Adviser Compliance Associates LLC, a regulatory consulting firm in Washington, D.C., SEC-registered firms should review the regulations of each state where they do business.
The Advisor must be registered as an investment advisor under the Investment Advisor Act of 1940, as amended (the Advisors Act) and remain registered.