There are two main items that help determine if one is considered an investment adviser, and they are:
Provides advice and/or analysis regarding securities either by making recommendations and/or providing opinions and/or research on securities and/or securities markets.
Receives compensation for the advice, analysis, recommendations, opinions they provide regarding investments/securities.
State Registered Investment Advisers – The IA that has $0.00 assets under management(AUM) up until they have $100,000,000.00 in AUM should fall under State jurisdiction. IAs that hold themselves out as financial advisers and only focus on financial planning or soliciting prospects/clients on behalf of other IAs also fall under the the State jurisdiction.
SEC Registered Investment Advisers – The IA that has AUM of $100,000,000.00 or more would need to register with the SEC. Also included in this federal registration jurisdiction are:
- Advisers to investment companies under the Investment Company Act of 1940;
- Advisers that providing services in 15 or more states;
- Retirement plan advisors and pension consultants providing investment advice to employee benefit plans, governmental plans and/or church/charity plans with respect to assets of plans having an aggregate value of $200,000,000.00.
- IA firms that operate mainly through an interactive website.