Definition of Investment Counsel Association Of America (ICAA)

A non-profit organization whose members work in the investment advisory profession. The Investment Counsel Association of America represents the interests of its members to regulatory bodies, such as the Securities and Exchange Commission (SEC). It also establishes standards and principles designed to govern the actions of its members, including those involving fiduciary duty. The ICAA played an active role in the United States Congress with the creation of the Investment Advisors Act of 1940, a federal law regulating investment advisors and professionals. 

Understanding Investment Counsel Association Of America (ICAA)

Founded in 1937, the ICAA comprises more than 160 investment advisory firms that collectively manage client assets in excess of $410 billion. The investment advisers manage assets for a spectrum of clients including individuals, families, institutions such as public and private pension plans, corporate funds, mutual funds, hedge funds, charitable organizations, and endowments.

All ICAA constituent firms may represent themselves as "investment counsel" under section 208(c) of the Advisers Act. As such, ICAA members are restricted to selling only investment advice and investment management services to clients, but they may not collect any commissions or generate profits from the transactions they facilitate. ICAA members may be compensated strictly based on negotiated fees for investment services rendered, where the money they collect is primarily a function of a percentage of assets under management (AUM).

ICAA Regulations

While the specifics rules ICAA members must follow are granular, generally speaking, they embrace a fiduciary duty to clients, with a basic premise of making suitable recommendations for their clients. And by statute, ICAA members must adhere to the following regulations:

  • The Investment Advisors Act of 1940
  • All rules and regulations of that the Securities and Exchange Commission has issued under the Advisers Act
  • The Securities Act of 1933
  • The Securities Exchange Act of 1934
  • The Commodity Exchange Act
  • All of the rules and bylaws created by the Municipal Securities Rulemaking Board

Advisers who fail to live up the rules and regulations are subject to a range of civil fines and criminal penalties.

In 2005, after 68 years in existence, the ICAA changed its name to Investment Adviser Association (IAA).