# Certain Broker-Dealers Deemed Not To Be Investment Advisers
> **US Securities and Exchange Commission** · Final rule. · Published 2005-04-19 · Effective 2005-04-15 · 70 FR 20424
## Document
- **Document number:** 05-7641
- **Category:** final-rule
- **Agency:** US Securities and Exchange Commission
- **Federal Register citation:** 70 FR 20424
- **CFR reference:** 17 CFR 275
- **Publication date:** 2005-04-19
- **Effective date:** 2005-04-15
- **Docket:** Release Nos. 34-51523
## Abstract

The Securities and Exchange Commission is adopting a rule addressing the application of the Investment Advisers Act of 1940 to broker-dealers offering certain types of brokerage programs. Under the rule, a broker-dealer providing advice that is solely incidental to its brokerage services is excepted from the Advisers Act if it charges an asset-based or fixed fee (rather than a commission, mark-up, or mark- down) for its services, provided it makes certain disclosures about the nature of its services. The rule states that exercising investment discretion is not "solely incidental to" the business of a broker or dealer within the meaning of the Advisers Act or to brokerage services within the meaning of the rule. The rule also states that a broker or dealer provides investment advice that is not solely incidental to the conduct of its business as a broker or dealer or to its brokerage services if the broker or dealer charges a separate fee or separately contracts for advisory services. In addition, the rule states that when a broker-dealer provides advice as part of a financial plan or in connection with providing planning services, a broker-dealer provides advice that is not solely incidental if it: holds itself out to the public as a financial planner or as providing financial planning services; or delivers to its customer a financial plan; or represents to the customer that the advice is provided as part of a financial plan or financial planning services. Finally, under the rule, broker-dealers are not subject to the Advisers Act solely because they offer full- service brokerage and discount brokerage services (including electronic brokerage) for reduced commission rates.

## Source
- [Federal Register document](https://www.federalregister.gov/documents/2005/04/19/05-7641/certain-broker-dealers-deemed-not-to-be-investment-advisers)
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