Legal Definitions - Investment Advisors Act

The Investment Advisors Act is a law created by the federal government and enforced by the Securities and Exchange Commission. Its purpose is to regulate investment advisers, who are professionals that provide advice to people and companies about investing their money.

For example, if you hire a financial advisor to help you decide how to invest your retirement savings, that advisor is likely subject to the Investment Advisors Act. The law requires them to register with the SEC and follow certain rules to protect their clients.

Another example might be a company that manages investments for wealthy individuals or institutions. They would also be subject to the Investment Advisors Act and would need to follow the rules set out in the law.

Overall, the Investment Advisors Act is designed to ensure that investment advisers act in their clients' best interests and provide accurate and honest advice. It helps protect investors from fraud and other unethical practices in the financial industry.