Does anyone know if it's OK to send an article from a magazine to a client, from a regulatory standpoint? Assume I bought the magazine, simply ripped out the article and sent it to a client or prospect with a post-it saying: " I thought this might interest you." It could be about golf, the economy, or anything.
My compliance said I can't, so of course I won't, but I'm just curious.
Regulators are concerned about finding criminals - selling Grandma a VA with her last $25k that was in a CD or "guaranteeing" investment returns and other stuff that flies in the face of common sense.
However, if you are found 'out of compliance' and doing things that your compliance officer doesn't know about, with materials & literature that isn't on file with your B/D, then YOU are the criminal as well as the firm for not supervising your activities.
An article itself would never be the issue.
I'm not an expert on this, but it seems that if you want to rip out an article and write a note on there to a client or prospect because it would be of interest to them, there shouldn't be a problem with that. You would want to keep a copy of what you sent with your compliance department's approval in your correspondance file. If you're compliance department won't approve that, then it's probably a no-go.
A bigger problem would be if you wanted to send it out to several clients and prospects and made copies of the article without getting clearance due to copyright infringments. That would not be a good road to go down.
There are plenty of articles that are published which are good enough to already have gotten client approval (think of Nick Murray articles, Barron's articles touting success of fund managers, etc...). These are designed to be sent out. So it's not necessarily the fact you are sending out an article that is wrong, it's that it needs to be approved.
Some compliance departments (yours possibly) will reject anything you give them. Other's (mine) will approve these types of things as long as there are no guarantees about performance, and all that mumbo jumbo in it.
As far as sending out a non-business related item, like an article on golf, I can't see why any compliance office wouldn't allow it.
I'm not surprised by this.
It's similar to sending out a research report from Merrill Lynch to your clients, when you are employed through Smith Barney.... it will never be approved. Big firms are more and more restrictive about advisors who are sending out an opinion, on anything, without having reviewed it first. As a result, they would prefer NOT to review anything, since it didn't come from their firm in the first place. Uniformly reject everything, is the best policy. If people want to fight about it, and bring it to the attention to their regional manager, only then will it seriously be considered for approval.
On sending out a ripped out page... it's your magazine, and you can do with it as you please. You cannot, however, make copies and send it out to your clients (those days are long gone...), since that would be copyright infringement and distribution. That, of course, is illegal, unless reprints are specifically allowed.
Yeah, it shouldn't be a big deal... but, the firms are sooooo overly conscious and would prefer to deny, deny, and deny.....
I thought ripping out articles to send to clients with a handwritten note was straight out of the EdJones playbook, was I mistaken?