A Brief Summary of the Investment Advisers Act of 1940

A business leader with entrepreneurial experience, Christopher J. Henneforth co-founded Omnia Medical in 2014 and serves as its chief financial officer. In addition, Christopher J. Henneforth draws on a wide range of experience as an investment adviser.

The Investment Advisers Act of 1940 governs and specifies investment advisor functions and duties in the United States. An investment adviser provides investment advice or performs securities research on behalf of their client for a fee.

A 1935 report to Congress by the Securities and Exchange Commission (SEC) on investment trusts and investment firms prompted the Act. It lays the legal basis for people who advise individuals, pension funds, and organizations on investment concerns. It defines what constitutes investment advice and registration requirements.

The Act sets the fiduciary standard and outlines the regulatory authority of the SEC and states. It establishes the responsibility of loyalty and care, requiring the adviser to put their client’s interests ahead of their own.