The Securities and Exchange Commission has clarified that under Regulation Best Interest it will not tolerate broker-dealers calling themselves “advisers” unless they are registered as investment advisers, except in certain cases — for example, as a municipal adviser, commodity trading adviser, or adviser to a special entity.
In updated frequently asked questions guidance, the SEC states the agency “presumes that the use of the terms ‘adviser’ or ‘advisor’ in a name or title by a broker-dealer that is not also registered as an investment adviser is a violation of the requirement to disclose the broker-dealer’s capacity under Regulation Best Interest’s Disclosure Obligation.”
