Image Credit: Alex Nabaum
By Jason Zweig | Nov. 15, 2019 11:00 am ET
An ad pops up on your phone. There’s your favorite NBA superstar at the foul line. Positioning himself for a free throw, he looks into the camera: “I’ve known Caesar Cash for years. He’s a straight shooter, just like me.” He fires the ball at the hoop. Swish! “Cash Financial Advisors,” grins the star. “Move your money to the straight shooters.”
Since 1961, it’s been illegal for investment advisers to use testimonials. A rule proposed by the Securities and Exchange Commission earlier this month would change that.
The good news: The proposal uproots acres of regulatory dead wood.
The bad news: It would permit things nobody needs, like cheesy endorsement ads. And it doesn’t do enough to encourage things investors do need, such as widespread performance information.…
To read the rest of the column:
https://www.wsj.com/articles/move-over-viagra-ads-here-come-the-financial-advisers-11573833621
For further reading:
Books:
Benjamin Graham, The Intelligent Investor
Jason Zweig, The Devil’s Financial Dictionary
Jason Zweig, Your Money and Your Brain
Jason Zweig, The Little Book of Safe Money
Articles and other resources:
SEC proposed rule, “Investment Adviser Advertisements…,” Nov. 4, 2019
SEC adopted rule, “Advertisements by Investment Advisers,” Nov. 1, 1961 (see p. 10548)
The Difference between an Investment Firm and a Marketing Firm