SEC

Can I Text My Financial Advisor?

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text broker financial planner advisor

When it comes to technology, the financial industry often moves slowly. Back when I was starting out as a financial planner and financial advisor, I was forbidden from having a website, or financial blog like this one for fear that it would constitute non-compliant advertising. The irony was that as someone a bit ahead of the curve on that, I likely could have built up the financial planning practice I wanted, without doing something I didn’t want, cold calling. These days, numerous financial advisory firms run websites and blogs exactly like the one I wanted to run a decade ago. It begs the question how it can be perfectly fine, and non-scary now, but not then. I also never understood how a person who feels good fast-talking strangers on the phone would be considered “more honest” than someone willing to put into writing what they were saying. But, rules are rules. Text Messaging Financial Professionals and Brokers Not long after I left financial planning, I wrote some articles about the SEC and FINRA slowly loosening rules on various forms of electronic financial communications, in particular releasing things like Quarterly Reports on a company website, instead of the, then current, default …

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Investing Scams Newsletters

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Scamming investors is a very old practice. Way before a centralized stock market institutionalized the dreams of investors looking to get rich, there were unsavory tricksters looking to pray on those dreams. Are Investing Newsletters Scams? Not all newsletters are scams. However, it is important to remember that even legitimate newsletters seldom have a solid, long-term, track record of beating the market. The statistics and returns are often carefully calculated in the just the right way as to show the newsletter in the best possible light. For example, a newsletter may only report it’s “best picks” returns. This allows a retroactive look at what the “best picks” were. For newsletters that are scams, there are some useful ways to spot them. Other FinanceGourmet articles on finance schemes: Credit Karma Is a Scam? Is Quizzle a Scam Is Credit Sesame Safe? FAFSA.com scam First, a legitimate newsletter won’t promise the sun and the moon, especially, after you have subscribed to it. Companies frequently boast a little big when they are advertising to new customers. However, once you buy that new car, the manufacturer doesn’t include a section in the owner’s manual about how to beat a fighter jet in a drag …

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Why Facebook Doesn’t Count as Public Disclosure

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Reed Hastings’ post on Facebook does not count as public disclosure according to the SEC. The agency sent a notice to Hastings and Facebook to that effect soon after the post. Since then, Hastings’ defense has centered around the contention that the information was not material. No claim that a Facebook post is public has been made. Facebook Is Not Public Disclosure Regulation FD requires that publicly traded companies disclose all material information publicly. It prevents the practice of selectively telling Wall Street analysts or other people news about the company. While the technology community thinks otherwise, the SEC does not consider a post on Facebook as public for this purpose. The SEC published guidance in 2008 regarding the disclosure of material information online by publicly traded companies. A central tenet of that piece was that the company must make it clear that is does, and will, publish such information online. In addition, the company must make it clear WHERE such information will be published. Finally, investors must EXPECT that material information will be posted in such a location. Since 2008, most publicly traded companies have gone on to include in their traditional printed materials a notice stating that the …

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Trading Basics from the SEC

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The SEC released an interesting item today.  It’s a two and a half page "bulletin" entitled Investor Bulletin: Trading Basics. Ironically, anyone who knows enough about the stock market to know about the investor education materials offered by the SEC probably already knows everything included in the PDF file. Be that as it may, if you want an official government agency explanation of terms like Market Orders, Limit Orders, Stop Orders, and Stop-Limit Orders, here is a nice, short, easy to read one for you. By the way, there are numerous investor education pieces available at the SEC website. Just search your topic and add site:sec.gov to the end of your search to limit results to those that are on the official U.S. Securities and Exchange Commission website.

SEC Advisory Committee Recommends Ways to Improve Financial Reporting

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The SEC became concerned that financial reporting and disclosure was in need of some smoothing out and improvement, so in true government fashion, it formed an advisory committee to explore ways to improve financial reporting for investors. You may recall that I mocked the whole thing based on the fact that A LOT of that complexity is actually the fault of the SEC and other assorted regulators who insist on constantly adding requirements of dubious value.  However, making the system better is making the system better and I welcome the SEC advisory committee’s report even if most of what it does is to undo things the SEC has done before. So, without further ado, I will download the Advisory Committee’s report elegantly entitled: FINAL REPORT of the ADVISORY COMMITTEE on IMPROVEMENTS to FINANCIAL REPORTING to the UNITED STATES SECURITIES and EXCHANGE COMMISSION After quickly reading over the document I will report the recommendations here and … wait a second — So, the report is 120 pages long and then there are 48 pages of appendixes.  Hmmm.  Well I’ll get back to you a little later.  I guess we won’t be improving things by making them any shorter and easier to …

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SEC Thinks Prospectuses Are Too Big!

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laugh I laughed so hard I ended up crying. The [tag]SEC[/tag] is concerned that the prospectuses that mutual fund companies send to their clients are too big and full of legal mumbo jumbo to be useful to the general public. How many of you think that mutual fund companies WILLINGLY CHOOSE to spend the money to develop, write, print, and mail a 38-page book to your house, not just once, but every single year you own the fund?

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