For example, there is a legal and cultural separation of banks and brokerages in the
What must be determined is whether the investment advising services provided by these people are central to their professions or incidental to them. If investment advising is their main stock and trade, then they need to register as IAs.
This exception also applies to RRs, by the way. It is acceptable for you, as a stockbroker or bond trader, to suggest a security to a client as long as you are compensated based on the trade rather than the advice.
Independent journalists are exempt. So are advisors who focus solely on
Other exemptions include the following:
- an advisor whose clients all live in the same state as her principal office and who does not furnish advice or issue analyses on any security that trades on a national exchange,
- an advisor whose only clients are investment companies or insurance companies, or
- an advisor who has had fewer than 15 clients over the previous 12 months and who does not hold herself out to the public as an investment advisor.
Remember, this Act is a federal law, so that is its scope. What goes on within state borders is the state's business to regulate. That explains exemption 1 above. It also explains the legal reason for registering as an IA: to be permitted to use the U.S. Mail and other institutions of interstate commerce.
Registering As An Investment Advisor
Financial AdvisorThe rules surrounding the DOL's fiduciary proposal are confusing for advisors and clients. Here’s what we know so far.
TechWith management fees falling, advisors are wondering what they can do about it. Here are a few tips.
Small BusinessIs your advisor working for you, or for him/herself? Find how to tell the difference.
Financial AdvisorClients fire financial advisors for many reasons. Here's a rundown on why they're likely to do so and how to avoid losing any from your roster.
Financial AdvisorAttracting good clients is only half the battle. Here's how financial advisors can keep them for life.
Financial AdvisorThere is no reason for a client to stay with a financial advisor who is not serving his or her needs. Here are some red flags to look out for.
Financial AdvisorThese are the top challenges that financial advisors face today.
Financial AdvisorSo you've gone to the trouble and expense of hiring a financial advisor. Here's how to decide whether they're doing you right or wrong.
Financial AdvisorAdvisors need to make a living too, but doing so by cutting corners at a client's expense isn't right. Here are the top complaints against advisors.
TechIn an era of fee compression here's how financial advisors can justify what they charge clients.