Investment Advisers Act of 1940

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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.

Investment Advisers Act of 1940

A federal act that defines what an investment adviser is, requires such advisors to register with the SEC, and sets standards for advertising, disclosure, fees, liability, and record keeping. The Act was passed to protect investors. Also called Advisers Act.
References in periodicals archive ?
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.
The Firm must be registered with the Securities and Exchange Commission under the Investment Advisors Act of 1940. 2.
Indeed, sources point out, most CFP certificants are also registered investment advisors (at the firm level) or investment advisor representatives, which permit them to sell securities; in either case, the certificant is subject to the Investment Advisors Act of 1940, which, observers say, makes them a "per se fiduciary." Sources note that fiduciary language now included in Financial Planning Association-recommended forms dealing with the financial planning engagement and disclosures are already part and parcel of an ADV form required of registered investment advisors and investment advisor reps.

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