Investment Advisor Exclusions
June 13, 2025 | By Kevin Vela
Investment advisors are required to register with the Securities and Exchange Commission (SEC) and, if in Texas, with the Texas State Securities Board. However, not everyone who discusses money or investments is considered an investment advisor. The following key exemptions are provided.
Not Everyone Giving Advice is an Advisor
Some individuals are automatically excluded from the “investment advisor” definition – no registration or regulation required, including:
- Bankers
- Lawyers
- Teachers
- Broker-Dealers
These roles are generally not considered to be primarily engaged in providing investment advice to the public in a way that would require registration.
Publishers: Free Speech or Financial Advice?
The SEC provides an exemption for publishers – provided they meet specific criteria. A publisher is excluded from registration requirements if:
- Their content is NOT tailored to individual clients;
- The information shared is objective and disinterested; and
- The publication is general and regularly circulated – not occasional updates or selective recommendations.
However, the line can certainly be crossed. In the case of Yun Soo Oh Park (“Tokyo Joe”), the SEC found that he promoted securities in which he held personal stakes, with the apparent goal of manipulating market prices. Because the advice was not disinterested, he was not eligible for the publisher exemption. Similarly, in the Weiss Research case, the SEC ruled that the firm’s auto-trading service, which executed trades based on its published recommendations, constituted investment advice. The added functionality moved them beyond the bounds of the publisher exclusion.
Family Offices: Limited Scope, Broad Definition
Family offices are generally exempt from the definition of an investment adviser, provided they meet the applicable criteria:
- They provide advice ONLY to family clients;
- They are wholly owned and controlled by family members; and
- They do not market themselves to the public as advisors.
The SEC offers a broad interpretation of “family,” which can include key employees, charitable organizations controlled by the family, and even certain former family members. However, it’s important to note that the previously existing exemption for entities with fewer than 15 clients was removed under the Dodd-Frank Act of 2010. That path to exemption is no longer available.
Real Estate and Other Non-Securities Advice
Advice related to real estate, commodities, coins, or precious metals is not considered advice “about securities,” and therefore typically does not trigger investment advisor registration requirements.
However, it’s important to draw a distinction between advice about direct ownership – such as holding title to physical property – and advice about entities that invest in real estate (such as real estate investment trusts (REITs) or investment partnerships). The latter does involve securities and may require registration.
Final Thoughts
Navigating who does, and does not, fall under the definition of an investment advisor can be complex. These exclusions exist to allow professionals and organizations to operate within specific boundaries without being subject to unnecessary regulation. That said, the distinctions can be subtle, and missteps can carry serious regulatory consequences.
If you’re unsure whether your activities fall within an exemption, or if your business model is evolving, we recommend a careful review.
Kevin would like to thank VW law clerk, Emily Keller, for her help with this blog.