Which of the following statements regarding investment advice is true?

The statement that licensing is required for legality is correct because providing investment advice often involves regulatory requirements designed to protect consumers. Many jurisdictions require individuals or firms that provide financial advice to be licensed or registered with regulatory authorities. This ensures that the adviser has met certain standards of education and experience, and it helps to hold them accountable for their advice.

Licensing serves to protect consumers by ensuring that those who offer investment advice have a thorough understanding of financial products and can act in the best interest of their clients. Without licensing, anyone could give advice regardless of their qualifications, which could lead to misinformation and potential financial harm to consumers.

In contrast, the other options suggest that expertise, financial stability, or formal institutional status alone could suffice in providing investment advice, which does not align with regulatory practices aimed at safeguarding the interests of clients in the financial realm.