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Finance: What is the Investment Advisers Act of 1940? 32 Views


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Description:

What is the Investment Advisers Act of 1940? Must be pretty special if we're still talking about it seventy years later.

Language:
English Language

Transcript

00:00

Finance a la shmoop. What is the Investment Advisors Act of 1940? [The question written on a blackboard]

00:08

All right well a whole lot of acting going on in that 1940 there, best actor Robert [1940s black and white film]

00:13

Donat best actress Vivien Leigh, best investment Act yeah this one well too

00:19

many poor uneducated folks got taken in the market gyrations of the wild stock [Girl looking offended]

00:26

market in the decade and changed before this act happened. So Congress then set

00:30

out a whole bunch of standards under which Investment Advisers must act yeah [Documents from the act]

00:36

see where we got that whole acting thing all right for example investment [The title of the act is highlighted]

00:40

advisors with more than 25 million bucks under their care must register with the [Advisor next to a big sack of money]

00:45

SEC making all of their actions quote aboveboard unquote and making it much

00:50

harder for fast-talkin city slickers to abscond with the hard-earned savings of [Adviser taking money away from people]

00:55

ma and pa farmer. Well the Act also outlined the structure under which

00:59

advisors can charge fees and it created the then path-breaking notion that an

01:05

investment advisor must put the interests of their client ahead of their [Advisor interests above client interests is swapped around]

01:10

own personal interests and this was like a thing back then yeah it sounds

01:14

shocking like you wouldn't need to explicitly state this in a modern polite

01:18

normal society but in fact the wild world of that era while the notion that [People at a show in the 40s]

01:23

you could not in fact actively steal your clients money so now is considered

01:28

liberalism go figure... [Liberalism stamp]

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