Investment Advisors:

BASICS

• Anyone who provides investment advice to others are subject to regulation by federal AND state regulators.

• If you are thinking about providing financial information to someone, you need to determine what regularity requirements, such as registration.

THE LAW

• Section 202(a)(11) of the Investment Advisers Act of 1940(15 U.S.C. 80b-2(a)(11)), which is a key federal law, defines "investment adviser" in part as "any person who, for compensation, 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, or who, for compensation and as part of a regular business, issues or promulgates analyses or reports concerning securities."

The 3 Standards

Provide

•Provide advice or analyze securities either by making direct or indirect recommendations to clients.

•Provide research or opinions on investments or investment markets

Receive

•Receive Compensation in any form

Engage

•Engage in these actions regularly

AND YOU ARE IN!

REGISTRATION

STATE

• Register in the state you are doing business in.

• Less than 25 mill in assets…

SEC

• U.S. Securities and Exchange Commission

• More than 30 mill in assets..

Have 25-30 mill in assets, you get to choose who you want to register with!! YAY!

DISCLOSURE

• All advisors are required to provide a disclosure for their client.

• Very Important!

• Basically it is a guide to how you do business. What you are going to do with their assets.

• When you are handling someone's assets in a personal matter, you must inform them of everything you are doing with their investment. That is the purpose of a disclosure.

DISCLOSURE Provided…

• What kinds are services are available• Who is providing those services• What fees and other expenses will the client be subject to

and are they negotiable• Is the adviser being compensated from other source• Is the adviser affiliated with another adviser, a broker-

dealer or an issuer of securities• Can you implement a financial plan anywhere or do you

only get to keep the plan if you implement it through the adviser

• What other potential conflicts of interest exist that might affect the adviser's recommendations