What does the term 'investment adviser' refer to in relation to the securities industry?

The term 'investment adviser' primarily refers to a professional who provides advice to clients regarding the purchase and sale of securities, and often includes comprehensive financial planning services. Investment advisers have a fiduciary duty to act in the best interests of their clients, which includes offering tailored investment strategies based on the client's individual financial situation, goals, and risk tolerance. They often charge fees for their services, reflecting the depth of their guidance and the personalized nature of their advice.

This definition distinguishes investment advisers from other roles in the securities industry, such as broker-dealers, who primarily execute transactions on behalf of clients rather than offering comprehensive advice. This focus on providing professional advice rather than merely facilitating trades is what sets investment advisers apart within the securities landscape.