What does the term "investment adviser" refer to?

The term "investment adviser" specifically refers to a firm or individual that provides advice about investment strategies or the purchase and sale of securities for compensation. This designation is important as it encompasses professionals who offer tailored advice or guidance that takes into account various factors, including a client’s financial situation, investment goals, and risk tolerance. Investment advisers are typically registered with regulatory bodies and are required to adhere to fiduciary standards, meaning they must act in the best interest of their clients.

The choice that describes a firm that provides investment advice for compensation captures the essence of what an investment adviser does, emphasizing both the advisory role and the compensation aspect that legitimizes their practice in this capacity. This definition helps to differentiate investment advisers from other financial services professionals who may not offer the same fiduciary duty or personalized advice.