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Investment Advisers Act of 1940

The US statute requiring those paid for advising on securities to register and imposing a fiduciary duty, with disclosure, custody, advertising and compliance program obligations.

The Act catches anyone who, for compensation, is in the business of advising others about securities. Registration goes to the sec above an assets-under-management threshold and to state regulators below it, and the vehicle for both is form-adv.

Courts read a fiduciary duty into the Act's antifraud provisions: duties of care and loyalty, with full and fair disclosure of conflicts and informed client consent. That standard is stricter than the brokerage regulation-best-interest rule.

Operational rules do the real work in examinations. Custody rules dictate who may hold client assets and when a surprise audit is required, the marketing rule governs testimonials and performance claims, and the compliance rule requires written policies under a chief-compliance-officer.

Related: registered-investment-adviser, form-adv, fiduciary-duty, chief-compliance-officer, regulation-best-interest

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