Excluded from the Investment Adviser Definition vs Exemptions from State Adviser Registration
Banks, incidental professionals, broker-dealers, and publishers are not advisers at all. An adviser with no office in the state and only institutional or very few clients there.
What is the difference between Excluded from the Investment Adviser Definition and Exemptions from State Adviser Registration?
Excluded = not an investment adviser at all. Exempt = is an adviser, but need not register in the state. The exam tests this distinction constantly.
| Excluded from the Investment Adviser Definition | Exemptions from State Adviser Registration | |
|---|---|---|
| In one line | Banks, incidental professionals, broker-dealers, and publishers are not advisers at all. | An adviser with no office in the state and only institutional or very few clients there. |
| Example | An accountant who charges separately for investment advice, or advertises it, is no longer 'solely incidental' - and becomes an adviser. | An out-of-state adviser whose only in-state client is an insurance company does not register in that state. |
| Unit | Uniform Securities Act & Registration | Uniform Securities Act & Registration |
| Series 65 | Section 4: Laws & Ethics | Section 4: Laws & Ethics |
What is Excluded from the Investment Adviser Definition?
Not investment advisers under the Act: banks, savings institutions, and trust companies; lawyers, accountants, engineers, and teachers whose advice is solely incidental to their profession (sometimes remembered as LATE); broker-dealers whose advice is solely incidental and who receive no special compensation for it; and publishers of bona fide newspapers or financial publications of general, regular circulation. An exclusion means the person is outside the definition entirely.
What is Exemptions from State Adviser Registration?
An investment adviser with no place of business in the state need not register there if its only clients in the state are institutions - investment companies, other advisers, broker-dealers, banks, trust companies, savings institutions, insurance companies, and large employee benefit plans - or if it qualifies under the de minimis exemption. Exempt advisers remain subject to the antifraud provisions.