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Impersonal Investment Advice: The Gray Area Between Tailored and Personal Advice
PINE Advisor Solutions | 19 September 2025
In an era where digital tools, scalable models, and algorithmic guidance are reshaping the way advisers engage investors, it has never been more important to understand where “impersonal” ends and a client relationship begins.
While many registered investment advisers (“RIAs”) provide investment education or model portfolios without intending to create formal advisory relationships, the moment an adviser offers ongoing and tailored guidance - even subtly or occasionally - the SEC considers that recipient a client under the Investment Advisers Act of 1940 (the “Advisers Act”).
Defining “Impersonal” vs. “Personal” Advice
The Form ADV Glossary is clear: a client relationship exists when an adviser provides continuous and regular supervisory or management services tailored to an account.
One-time advice or generalized communications like newsletters or digital content typically don’t rise to that level. However, if an adviser has either;
This means that even if the adviser does not manage the account directly (or as an example, the adviser does not execute trades on the account), but offers ongoing recommendations tailored to a person’s or another adviser’s circumstances, that relationship must be counted as a client and disclosed on Form ADV.
Model Portfolios and Hybrid Offerings
This distinction becomes particularly significant in models that combine general education with optional personalized upgrades.
For example, some advisers publish model portfolios as examples or illustrative tools, which may qualify as impersonal advice if they are distributed broadly without reference to individual suitability.
However, if an adviser begins recommending one model over another based on a user’s profile, or explains how the model suits individual goals, or even updates the model based on changing circumstances, the line is crossed. The model user has become a client and triggered the full suite of regulatory obligations that come with a client.
Compliance and Disclosure Implications
While many firms seek to scale efficiently by offering both impersonal and personalized services, this hybrid model demands heightened compliance oversight.
The delivery of even occasional tailored advice triggers obligations under the Advisers Act, including fiduciary duties, disclosure in Form ADV Part 2A, brochure delivery, supervision of advisory personnel, advertising rules, and recordkeeping under Rule 204-2.
Marketing materials, too, come under scrutiny, especially if they imply customization where none exists, or fail to clearly distinguish between general content and personal advice. Disclaimers must be explicit, and client segmentation must be defensible.
Sub-Advisers and Shared Responsibility
A particular nuance arises when firms rely on sub-advisers.
If the adviser provides the investment recommendations or portfolio design and the sub-adviser executes trades based on those instructions, the regulatory responsibility still rests heavily on the primary adviser.
The SEC expects an adviser to account for these types of clients on Form ADV, meet fiduciary obligations, and make appropriate disclosures, including descriptions of the sub-advisory relationship, the nature of the services provided, the suitability of the accounts, and any conflicts of interest.
Substance Over Labels: The SEC’s Perspective
At the heart of this issue is not just what advisers say their services are, but how they are actually delivered.
SEC examiners prioritize the realities of client interactions over how services are labeled. If an adviser’s process, even implicitly, appears tailored through onboarding conversations, customized risk profiles, or tiered content access, the SEC may reclassify the relationship as personalized advice.
Advisers must ensure that they can draw a defensible line between impersonal and personal advice and maintain documentation that supports that distinction.
Technology, Innovation, and the Road Ahead
As the industry continues to innovate through tech-driven delivery models, advisers must remain equally diligent in compliance. Generalized insights can quickly become personalized guidance, and with that shift comes new legal and operational duties. The safest path is to identify where your firm stands on that spectrum… and prepare to meet the obligations that follow.
While many registered investment advisers (“RIAs”) provide investment education or model portfolios without intending to create formal advisory relationships, the moment an adviser offers ongoing and tailored guidance - even subtly or occasionally - the SEC considers that recipient a client under the Investment Advisers Act of 1940 (the “Advisers Act”).
Defining “Impersonal” vs. “Personal” Advice
The Form ADV Glossary is clear: a client relationship exists when an adviser provides continuous and regular supervisory or management services tailored to an account.
One-time advice or generalized communications like newsletters or digital content typically don’t rise to that level. However, if an adviser has either;
- discretionary authority; or
- makes recommendations on specific securities, and does so based on an individual’s needs, then that adviser is now providing personalized advisory services.
This means that even if the adviser does not manage the account directly (or as an example, the adviser does not execute trades on the account), but offers ongoing recommendations tailored to a person’s or another adviser’s circumstances, that relationship must be counted as a client and disclosed on Form ADV.
Model Portfolios and Hybrid Offerings
This distinction becomes particularly significant in models that combine general education with optional personalized upgrades.
For example, some advisers publish model portfolios as examples or illustrative tools, which may qualify as impersonal advice if they are distributed broadly without reference to individual suitability.
However, if an adviser begins recommending one model over another based on a user’s profile, or explains how the model suits individual goals, or even updates the model based on changing circumstances, the line is crossed. The model user has become a client and triggered the full suite of regulatory obligations that come with a client.
Compliance and Disclosure Implications
While many firms seek to scale efficiently by offering both impersonal and personalized services, this hybrid model demands heightened compliance oversight.
The delivery of even occasional tailored advice triggers obligations under the Advisers Act, including fiduciary duties, disclosure in Form ADV Part 2A, brochure delivery, supervision of advisory personnel, advertising rules, and recordkeeping under Rule 204-2.
Marketing materials, too, come under scrutiny, especially if they imply customization where none exists, or fail to clearly distinguish between general content and personal advice. Disclaimers must be explicit, and client segmentation must be defensible.
Sub-Advisers and Shared Responsibility
A particular nuance arises when firms rely on sub-advisers.
If the adviser provides the investment recommendations or portfolio design and the sub-adviser executes trades based on those instructions, the regulatory responsibility still rests heavily on the primary adviser.
The SEC expects an adviser to account for these types of clients on Form ADV, meet fiduciary obligations, and make appropriate disclosures, including descriptions of the sub-advisory relationship, the nature of the services provided, the suitability of the accounts, and any conflicts of interest.
Substance Over Labels: The SEC’s Perspective
At the heart of this issue is not just what advisers say their services are, but how they are actually delivered.
SEC examiners prioritize the realities of client interactions over how services are labeled. If an adviser’s process, even implicitly, appears tailored through onboarding conversations, customized risk profiles, or tiered content access, the SEC may reclassify the relationship as personalized advice.
Advisers must ensure that they can draw a defensible line between impersonal and personal advice and maintain documentation that supports that distinction.
Technology, Innovation, and the Road Ahead
As the industry continues to innovate through tech-driven delivery models, advisers must remain equally diligent in compliance. Generalized insights can quickly become personalized guidance, and with that shift comes new legal and operational duties. The safest path is to identify where your firm stands on that spectrum… and prepare to meet the obligations that follow.