SEC RELEASE IA-1092

Summary

SEC Release IA-1092 is a crucial interpretive document issued by the Securities and Exchange Commission in 1987 that expanded the definition of who must register as an investment adviser under the Investment Advisers Act of 1940. This release clarified that professionals like financial planners, pension consultants, and sports and entertainment representatives could be considered investment advisers if they provide investment advice for compensation, even if that's not their primary business. The release established important tests for determining adviser status, including whether someone holds themselves out as providing investment advice, whether they provide advice regularly as part of their business, and whether they receive compensation for such advice.

Usage Context

This term is essential when studying securities regulation, understanding who must comply with investment adviser rules, and learning about the evolution of financial services regulation. It's particularly important for students planning careers in financial planning, wealth management, or securities compliance.

Common Confusions

• Thinking that only traditional investment advisers are covered by the Act
• Believing that incidental advice automatically exempts someone from registration
• Confusing investment adviser registration with broker-dealer registration
• Assuming that all financial planners must register as investment advisers
• Not understanding that compensation can be indirect, not just direct fees