Investment Adviser

Practical Law Glossary Item 1-386-4481 (Approx. 3 pages)

Glossary

Investment Adviser

Any person who for compensation either:

Engages in the business of advising others, either directly or through publications or writings, as to the value of securities or as to the advisability of investing in, purchasing, or selling securities.
As part of a regular business, issues or promulgates analyses or reports concerning securities.

(Section 202(a)(11), Investment Advisers Act of 1940 (Advisers Act).)

The Advisers Act requires most large investment advisers to register with the SEC and smaller investment advisers are required to register under the blue sky laws of the states in which they conduct business. Smaller private fund advisers, foreign private advisers, and private equity fund advisers are exempt from registration.

Investment advisers may have many different business models including acting as what is commonly known as a "financial planner," but also may include persons providing advice to pension plans, mutual fund companies, and advisers to hedge funds. In addition to regulation under the Advisers Act and state law, some investment advisers may be subject to regulation under the Investment Company Act of 1940, the Employee Retirement Income Security Act of 1974 (ERISA), and the Commodity Exchange Act.

For more information, see Practice Notes:

Investment Adviser | Practical Law