• Learn about registered investment adviser laws.businessman image by Christopher Hall from Fotolia.com
  
  A registered investment adviser registers with the Securities and Exchange Commission and advises clients on investment decisions. He is regulated by the SEC and, unlike a registered representative, does not report to a broker/dealer. Because the investment adviser is registered directly with the SEC, he is subject to special laws and regulations.
  
  

Anti-Fraud Provision

• The SEC prohibits misleading statements of material facts when conducting business. The investment adviser must act in the client's best interest unless the adviser has authorization from the client that allows otherwise.
  
  

Disclosure Rules

• An investment adviser must provide a client with a brochure about the adviser's services 48 hours before the client does business with the adviser. Otherwise, the client must be allowed to cancel all business transactions up to five days after agreeing to do business with the adviser. This rule does not apply to an adviser offering "impersonal services" for which compensation does not exceed $200. An investment adviser must also disclose any conflicts of interest, including conflicts that she does not believe will affect her recommendations. An adviser must disclose her compensation and how she is paid for her services as well. She also must disclose any personal financial conditions that may impair her ability to fulfill contractual obligations to the client.
  
  

Books and Records

• The Registered Investment Adviser must keep books and records about his business and must make these books available to the SEC upon request. He must also keep a record of all advertisements sent to more than 10 individuals. He must keep a record and explanation of all claims of performance on advertisements that are circulated.
  
  

Fees

• The adviser may not assign her fees to a third party without the client's knowledge and consent. The SEC also prohibits an adviser from charging performance fees. This means that her compensation must not be derived from an increase in the client's investment portfolio.