Passing unanimously in both the House and Senate,[1] it is the primary source of regulation of investment advisers and is administered by the U.S. Securities and Exchange Commission.
Findings Upon the basis of facts disclosed by the record and report of the Securities and Exchange Commission made pursuant to section 79z–4 of this title, and facts otherwise disclosed and ascertained, it is found that investment advisers are of national concern, in that, among other things— (1) their advice, counsel, publications, writings, analyses, and reports are furnished and distributed, and their contracts, subscription agreements, and other arrangements with clients are negotiated and performed, by the use of the mails and means and instrumentalities of interstate commerce; (2) their advice, counsel, publications, writings, analyses, and reports customarily relate to the purchase and sale of securities traded on national securities exchanges and in interstate over-the-counter markets, securities issued by companies engaged in business in interstate commerce, and securities issued by national banks and member banks of the Federal Reserve System; and
The study, however, found many instances of investment adviser abuse, such as unfounded "hot tips" and questionable performance fees.
The IAA mandated all persons and firms receiving compensation for serving as investment advisers to register with the SEC.
The requirement has been revised on several occasions since then, most notably with the passage of the Dodd–Frank Wall Street Reform and Consumer Protection Act of 2010.
Release 1092 went on to state that the "giving of advice need only be done on such a basis that it constitutes a business activity occurring with some regularity.
The IAA exempts "any lawyer, accountant, engineer, or teacher whose performance of such services is solely incidental to the practice of his profession."
The difference between a financial planner and an investment adviser, as it relates to the IAA, is also addressed in the aforementioned Release 1092.
Under the Act, investment advisers must register using Form ADV accompanied by a relatively modest fee.