SEC Release IA-1092 is a memo issued in 1987 by the Securities and Exchange Commission (SEC) and the North American Securities Administrators Association (NASAA) in response to the increasing number of financial planners and investment advisers in the 1980s. It reaffirms the definition of an investment adviser (IA) as described in a previous SEC release (IA-770), but with some additional clarifications.
The release includes the inclusion of pension consultants and advisers to athletes and entertainers as providers of investment advice. It also states that in some cases, firms that recommend investment advisers must also register themselves. Additionally, it clarifies that even if providing investment advice is not an IA’s primary business activity, if they do so regularly, it is enough to require registration. Furthermore, it states that registered representatives of broker-dealers who set up separate entities to provide financial planning or investment advice for a fee cannot rely on the broker-dealer’s exemption from registration. The release also highlights that compensation does not have to be monetary and can include products, services, or discounts. Finally, it specifies that sports or entertainment agents who only negotiate contracts and do not provide investment advice are excluded from the definition of an investment adviser.
