Regulatory Alerts2001-01-19
Activities that Do Not Constitute Providing Investment Advice for a Fee
The Pennsylvania Department of Banking issued an interpretive letter clarifying that state-chartered banks may provide general financial advice and refer customers to registered investment advisers as an incidental power under the Pennsylvania Banking Code. This permission is contingent upon the bank not acting as an investment adviser for a fee, maintaining no fiduciary capacity or investment discretion, and ensuring direct contractual relationships between customers and third-party advisers. The Department further advised that banks must carefully assess legal risks, disclose referral arrangements, and consult counsel to ensure proposed activities do not cross the threshold into regulated investment advisory services.
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