Laws & RegulationsQuestion 104 of 110
Which professional is most likely excluded from the definition of investment adviser when advice about securities is incidental to their practice and no special compensation is received?
a.A lawyer or accountant whose securities advice is solely incidental to their profession
b.A person holding themselves out as a financial planner
c.A firm charging a separate fee for portfolio management
d.An individual publishing paid stock recommendations
Explanation
Lawyers, accountants, teachers, and engineers (the 'LATE' exclusions) are generally excluded from the investment adviser definition when their securities advice is solely incidental to their profession and they receive no special compensation for it. Charging a separate fee for advice or holding oneself out as a financial planner removes the exclusion. The exclusion recognizes advice that is truly ancillary.
Law Reference: Investment Advisers Act of 1940Practice all 110 questions free — no signup required.
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