QUESTION: I have a question regarding opening an account for a 2nd
party under their name at a precious metals brokerage. I would have
power of attorney and trade for the party, for a percentage. I do not
have a license of any kind. Do you know the legalities of this?

REPLY: According to a web page from the SEC, most "People or firms
that get paid to give advice about investing in securities generally
must register with either the SEC or the state securities agency where
they have their principal place of business." Generally, those who
manage more than $25 million in assets must register with the SEC and
those who do not must register with their state securities department.

In addition, I recall that the SEC prohibits charging a percentage of
income for advisory/management services. All of the investment
advisors I know charge a percentage of assets under management except
for some that manage foreign investment accounts.

You did not state whether the investment consists of an offshore
trading account, but if the customers are U.S. persons, the SEC or the
state securities agency is likely to require registration and
compliance with their disclosure procedures. I'm not aware of any
exceptions where you are only helping one other person -- but that
would depend on state law. However, if you are the trustee of a
domestic trust, that might be an exception to having to register as an
investment advisor. And if you are an employee of a LLC or limited
partnership that is owned primarily by someone else, that might also
be an exception under state law -- or there might be some de minimus
rule about the number of investors or the amount of money involved.

You can find about 2,500 web pages on the subject by entering
"unregistered investment advisor" in Google, and by putting the entire
phrase in quotes. Many of the links are about actions taken by
specific states with respect to unregistered investment advisors. Here
are some additional links that might be helpful to you.

http://www.sec.gov/investor/brokers.htm

http://caselaw.lp.findlaw.com/scripts/getcase.pl?court=ok&vol=/appeals/1991/&inv\
ol=1991okcr34

http://mutualfunds.about.com/b/2003/12/17/sec-charges-first-unregistered-hedge-f\
und-advisor.htm

Vern

I'm not a lawyer and this is not intended to constitute legal advice.
Consultation with an attorney familiar with the securities laws of
your state is strongly recommended.