Does a third-party solicitor have to be registered as an investment adviser or investment adviser representative?
The Investment Advisers Act of 1940 and the associated SEC rules do not require the solicitor to register as an investment adviser as long as the solicitor’s activities are strictly limited to merely referring clients to a registered investment adviser in compliance with SEC Rule 206(4)-3. However, the majority of state securities regulators define the solicitation or referral of investment advisory clients as an investment advisory activity requiring the registration of the solicitor as an investment adviser or investment adviser representative. A registered investment adviser considering a solicitor arrangement should verify whether the intended solicitor’s activity is included under the state securities regulator’s definition of an investment adviser representative. If a state securities regulator requires an individual to be registered as an investment adviser representative in order to solicit investment advisory clients in a third-party capacity, does the solicitor have to be an
Related Questions
- Is a solicitor required to provide a client with a separate written solicitor disclosure when the registered investment adviser firm gives impersonal advisory services?
- Can the third-party solicitor’s referral fee be paid from the investment advisory fee charged by the registered investment adviser?
- Are there individuals that cannot serve as a solicitor on behalf of a registered investment adviser under SEC Rule 206(4)-3?
