Author Topic: People are starting to ask me for investing advice  (Read 2854 times)

mozar

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People are starting to ask me for investing advice
« on: August 28, 2018, 01:49:10 PM »
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« Last Edit: September 06, 2018, 07:38:05 PM by mozar »

ixtap

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Re: People are starting to ask me for investing advice
« Reply #1 on: August 28, 2018, 01:55:22 PM »
What state are you in? Are you sure you can legally charge without licensing? Are you sure you want to charge without a specific insurance policy?


mozar

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Re: People are starting to ask me for investing advice
« Reply #2 on: August 28, 2018, 02:21:29 PM »
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« Last Edit: September 06, 2018, 07:38:20 PM by mozar »

onlykelsey

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Re: People are starting to ask me for investing advice
« Reply #3 on: August 28, 2018, 02:26:03 PM »
I would definitely, definitely not do this. Or read the Investment Advisers Act of 1940 first, because it sounds like you would be giving advice with respect to securities for compensation, which could put you in the SEC's crosshairs.  Also think about whether you could be seen as a financial planner: https://www.sec.gov/fast-answers/answersfinplanhtm.html

I know nothing about Marlyand law, but that'd be worth looking in to as well.

mozar

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Re: People are starting to ask me for investing advice
« Reply #4 on: August 28, 2018, 02:35:31 PM »
The link you gave says that financial planners come from various backgrounds and to ask what their background is. So it doesn't say anything in particular is required. I'm open to registering with sec even though i won't be selling information about stocks bonds or options at all.

onlykelsey

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Re: People are starting to ask me for investing advice
« Reply #5 on: August 28, 2018, 02:44:10 PM »
The link you gave says that financial planners come from various backgrounds and to ask what their background is. So it doesn't say anything in particular is required. I'm open to registering with sec even though i won't be selling information about stocks bonds or options at all.

The SEC won't let you register until you advise clients with a very large (aggregate) amount of money, so you have to look to the state where you and your client are to see what their requirements are.  Some states have exemptions if you have just a couple clients, some absolutely do not.

ixtap

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Re: People are starting to ask me for investing advice
« Reply #6 on: August 28, 2018, 02:46:23 PM »
The link you gave says that financial planners come from various backgrounds and to ask what their background is. So it doesn't say anything in particular is required. I'm open to registering with sec even though i won't be selling information about stocks bonds or options at all.

How are you going to give investment advise without giving investment advise? Or are you saying you would never advise people to put their money in the stock or bond markets?

"Financial planners who give investment advise to their clients must register with the SEC or the appropriate state securities regulator."

mozar

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Re: People are starting to ask me for freedom advice
« Reply #7 on: August 28, 2018, 02:49:34 PM »
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« Last Edit: September 06, 2018, 07:38:45 PM by mozar »

ixtap

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Re: People are starting to ask me for freedom advice
« Reply #8 on: August 28, 2018, 02:57:22 PM »
I guess I mean investment in the more general sense. Like today we talked about whether she should downsize or not. I also told her about Vanguard and what an index fund is. So more like life advice? I would change the title of the thread but I'm not sure to what. Um freedom advice?

I am not a lawyer, but getting paid to tell people where to put their money and what kind of funds to use sounds like investment advice.

DS

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Re: People are starting to ask me for investing advice
« Reply #9 on: August 28, 2018, 02:58:57 PM »
In basic terms, not worth the liability for $200

mozar

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Re: People are starting to ask me for investing advice
« Reply #10 on: August 28, 2018, 03:12:44 PM »
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« Last Edit: September 06, 2018, 07:39:05 PM by mozar »

Mgmny

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Re: People are starting to ask me for investing advice
« Reply #11 on: August 29, 2018, 09:08:35 AM »
I agree that this is risky and you could get in trouble if you aren't careful as to what you are "advising" on.

How did this person get connected with you? Did your father just say, "Yeah my daughter is good with money, she can help you!" If someone told me that, I probably wouldn't be paying them hundreds of dollars for "My friend's daughter who is good with money's life advice." What is your marketing? How do people know to trust you? What is your angle?

What qualifies you to give non-investment, investment advice?

mozar

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Re: People are starting to ask me for investing advice
« Reply #12 on: August 29, 2018, 03:28:52 PM »
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« Last Edit: September 06, 2018, 07:39:27 PM by mozar »

tralfamadorian

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Re: People are starting to ask me for investing advice
« Reply #13 on: August 29, 2018, 04:12:41 PM »
Could you cover your liability by becoming a CFP? Depending on your educational background and work history, it could be an option without too much additional time or monetary investment.

Cache_Stash

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Re: People are starting to ask me for investing advice
« Reply #14 on: August 29, 2018, 05:44:51 PM »
Just the fact that you don't know what you have to do to dispense investment advice for a fee shows you don't know enough to dispense investment advice.

MoStache

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Re: People are starting to ask me for investing advice
« Reply #15 on: August 29, 2018, 06:37:12 PM »
Call yourself a “Life Coach”.


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katsiki

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Re: People are starting to ask me for investing advice
« Reply #16 on: August 29, 2018, 06:48:19 PM »
MoStache beat me to it...  There have been a few threads on "coaching".  I would still be careful but that is probably a safer route.

jlcnuke

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Re: People are starting to ask me for investing advice
« Reply #17 on: August 30, 2018, 07:23:47 AM »
That you are doing well financially does NOT qualify you to give professional financial advice to individuals. If you want to start a business as a financial advisor you need to research the requirements to do so legally in your state AND learn the rest of the stuff a financial advisor should be knowledgeable on which you probably have little or no knowledge of currently.

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Dicey

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Re: People are starting to ask me for investing advice
« Reply #18 on: August 30, 2018, 07:31:39 AM »
I agree that you're risking trouble. I'd suggest you don't do it for monetary gain. If you really enjoy the process and clearly don't need the money, do it for charity instead. "The fee is $250/hour, payable to [insert favorite charity name here]."

MrThatsDifferent

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Re: People are starting to ask me for investing advice
« Reply #19 on: August 30, 2018, 07:41:31 AM »
If youíre not going to be trained and qualified, donít do this. You want to be helpful? Suggest they read MMM. He didnít charge you shit. People need to own this and they do that by educating themselves. Donít make people dependent on you when thereís enough good info out there and if they have questions, show them this forum or others like it. Pay it forward, donít try to figure out how you can make money off the ignorant.

talltexan

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Re: People are starting to ask me for investing advice
« Reply #20 on: August 30, 2018, 07:48:08 AM »
I agree that you're risking trouble. I'd suggest you don't do it for monetary gain. If you really enjoy the process and clearly don't need the money, do it for charity instead. "The fee is $250/hour, payable to [insert favorite charity name here]."

Voting for this. Do not take the risk of accepting money for this. If you're truly giving correct advice, your clients will lose money in the short-term because they'll be making risky investments. It's practically certain this will happen at some point.

mozar

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Re: People are starting to ask me for investing advice
« Reply #21 on: August 31, 2018, 12:06:09 PM »
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« Last Edit: September 06, 2018, 07:40:01 PM by mozar »

seattlecyclone

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Re: People are starting to ask me for investing advice
« Reply #22 on: August 31, 2018, 12:52:38 PM »
Just the fact that you don't know what you have to do to dispense investment advice for a fee shows you don't know enough to dispense investment advice.

I strongly disagree with this sentiment. I have no idea what I would have to do to become a legally qualified professional investment advisor in my state. However I do know a thing or two about investing. If my advice is worse than the advice given out by the guy at the Edward Jones office in my neighborhood, I'll eat my hat.

Dreamer

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Re: People are starting to ask me for investing advice
« Reply #23 on: August 31, 2018, 01:10:35 PM »
You seem to be contradicting yourself.  You mentioned that you think "personal finance info should be free" but this whole thread is about how much you should charge.  Why not just do your dad's colleague a favor and spend another hour with her for free, or possibly meet for lunch again and have her pay.  If you have already done well financially, and you don't want this to be a regular thing, do you really need the money?  Why do you think it is necessary to charge a lot as a deterrent to future business?  Why not just decline requests for financial advice if it is not something you want to be doing?

MrThatsDifferent

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Re: People are starting to ask me for investing advice
« Reply #24 on: August 31, 2018, 03:07:54 PM »
I think life coach is a good idea. But maybe financial life coach or something. 
I appreciate what people are saying about following laws and stuff. I promise I won't be recommending any risky investments.
I told the lady I had lunch with about mmm and she called me to tell me how great the forum is. She could be reading this!

I looked into cfp but I got overwhelmed with all the requirements.  It doesn't look like my masters degree in accounting will translate. I also looked into the series 65 but after failing so many tests in the past ten years I need a break.

You donít wake up one day and decide, Iím going to be a coach and boom, you are one. They taking training too. If youíre overwhelmed by requirements and have failed multiple tests, then maybe you shouldnít be advising anyone?

Little Aussie Battler

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Re: People are starting to ask me for investing advice
« Reply #25 on: August 31, 2018, 03:20:45 PM »
I appreciate what people are saying about following laws and stuff. I promise I won't be recommending any risky investments.
Please think again about this.

Good investment advice depends on the personal circumstances of the individual, their investment goals and risk appetite.

What is a risky investment? If I'm just about to retire and have a very low risk appetite, dumping all my cash into an index fund might be 'risky'. What if you suggest an index fund and the market drops 30%?  What about insurance?

If I were you I would take the free lunch and provide some basic info (which it sounds like you have). If you want to get paid for 'advice', make it advice on how to reduce expenses - perhaps help people prepare and review their budget, identify areas of saving and then help them calculate the impact on their long-term financial position and prospects for retirement.

mozar

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Re: People are starting to ask me for investing advice
« Reply #26 on: September 01, 2018, 05:59:55 PM »
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You seem to be contradicting yourself.  You mentioned that you think "personal finance info should be free" but this whole thread is about how much you should charge.  Why not just do your dad's colleague a favor and spend another hour with her for free, or possibly meet for lunch again and have her pay.  If you have already done well financially, and you don't want this to be a regular thing, do you really need the money?  Why do you think it is necessary to charge a lot as a deterrent to future business?  Why not just decline requests for financial advice if it is not something you want to be doing?

These are all good questions.

Dr.Jeckyl

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Re: People are starting to ask me for investing advice
« Reply #27 on: September 04, 2018, 06:05:46 PM »
I've explained things to people, mostly my employees, without giving any advice. I try to get the new hires to sign up for the 401k and I explain what the different funds are, what the differences between the traditional and Roth 401k options. But when they are ready to pick funds I don't tell them what to pick.

I think it's a thin line between explaining and advising and my opinion is it's worth what the rest of my opinions are worth $0. My wife always tells me I should've went into financial planning. I tell her that those people are just out to take people's hard earned money.

If you truly want to advise people on finances follow the steps to become a fiduciary.

katsiki

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Re: People are starting to ask me for investing advice
« Reply #28 on: September 05, 2018, 03:15:20 PM »
I've explained things to people, mostly my employees, without giving any advice. I try to get the new hires to sign up for the 401k and I explain what the different funds are, what the differences between the traditional and Roth 401k options. But when they are ready to pick funds I don't tell them what to pick.


I do similar sometimes for new employees.  I also share a paycheck calculator so they understand the real impact of a 401k contribution.  The latter seems to help a lot of newer or younger folks.  They have this fear that they will lose too much money.

GreenEggs

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Re: People are starting to ask me for investing advice
« Reply #29 on: September 05, 2018, 03:50:59 PM »
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You seem to be contradicting yourself.  You mentioned that you think "personal finance info should be free" but this whole thread is about how much you should charge.  Why not just do your dad's colleague a favor and spend another hour with her for free, or possibly meet for lunch again and have her pay.  If you have already done well financially, and you don't want this to be a regular thing, do you really need the money?  Why do you think it is necessary to charge a lot as a deterrent to future business?  Why not just decline requests for financial advice if it is not something you want to be doing?

These are all good questions.


Friends are priceless.  Share friendly advice over a meal.  Tell them the basics.


Don't offer so much info that it becomes a "job" to you. 


You dad will be proud that you're treating his friends well, and you'll feel good too.

mozar

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Re: People are starting to ask me for investing advice
« Reply #30 on: September 06, 2018, 12:15:58 PM »
Because of this thread I have learned the difference between a financial coach and someone who gives investment advice. I'm looking into the financial coaching aspect. Thanks all.

MrThatsDifferent

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Re: People are starting to ask me for investing advice
« Reply #31 on: September 06, 2018, 02:43:55 PM »
Because of this thread I have learned the difference between a financial coach and someone who gives investment advice. I'm looking into the financial coaching aspect. Thanks all.

Youíre not qualified to be a coach either. Get the training, experience and education first. Learn the ethics of being one. Get supervision and mentoring. Then, maybe, youíll be read. Otherwise, start your own blog or podcast and pretend you know what youíre doing.