Who qualifies as an investment adviser?

An investment adviser is defined as a person or firm that provides advice about securities and is compensated for that advice. This includes not only giving recommendations on which securities to buy or sell but also offering comprehensive investment services tailored to the needs of clients. The essence of being classified as an investment adviser lies in receiving compensation for the advisory services provided, which establishes a fiduciary responsibility to act in the best interests of the client.

Individuals who simply offer free advice or opinions, such as those found on online forums, do not qualify as investment advisers because they do not provide their services for compensation or have a regulatory obligation toward the individual's financial well-being. Similarly, not only large institutions managing pension funds are classified as investment advisers; many small firms and individual professionals can also provide these services, provided they meet the criteria for registration and compliance with regulations. Lastly, a registered entity that only sells securities does not qualify as an investment adviser unless it also provides investment advice for which it receives compensation. Therefore, the correct choice accurately reflects the definition and requirements of what constitutes an investment adviser in the context of regulatory frameworks.