7

Let's say that a friend or two wants to give me x amount of dollars and asks me to invest in things. I charge them a fee or percentage even though I have no license to be a financial advisor or stockbroker etc.. Is this legal?

Edit: Of course, I forgot to add the country. This pertains to the US, US friends, dealing with any securities a US citizen can trade. Also, this I think would have to be under my account (e.g., with Scottrade) for risk of impersonating my friends.

|improve this question
  • 11
    You will need to add the country/state where you propose doing this for anyone to have a chance of answering. – TripeHound Jul 21 '17 at 6:39
  • 2
    It depends on what you are trading, with their money, and under what contract you accept their money. Read the US' Securities Act of 1933, you might be surprised at all of the exceptions.... but in other countries like the UK, I've heard horror stories for much less indiscretions. And although the following statement undermines the "rule of law", the reality is that the consequences guide the compliance, so figure it out. – CQM Jul 21 '17 at 7:53
  • 1
    Many countries disallow such financial arrangements without proper qualifications so the answer is highly dependent on your resident country. – DumbCoder Jul 21 '17 at 8:25
  • 5
    Beyond legality, I would be very, very wary of doing this. If you make a poor investment [either through lack of research or simple luck going against you afterwards], would you still be able to maintain a friendship with these people? This has the potential to put a severe strain on your relationship as any losses they experience may become 'your fault' in their eyes. – Grade 'Eh' Bacon Jul 21 '17 at 12:37
  • 2
    Where I live even doing it for free is illegal if you are not registered properly with securities regulators. – ApplePie Jul 21 '17 at 19:33
1

In the US, illegal.

Giving free investment advice (opinions) is really hard to get arrested for. Might lose you a friend, but nothing that would get cross-wise with the Securities and Exchange Commission. That said, I would never put those opinions in writing.

|improve this answer
  • 2
    You can easily get arrested for giving free investment advice, if that advice is based on insider knowledge. – Mike Scott Jul 27 '17 at 18:37
  • well sure, you can get arrested for acting on insider knowledge yourself, regardless of sharing it. The original question was charging someone a fee for investment advice; nothing about the question involved insider trading. – rocketman Jul 28 '17 at 17:36
  • That's true, but comments here should be truthful statements in their own right, and not merely when considered in the context of the question. – Mike Scott Jul 29 '17 at 8:15

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Not the answer you're looking for? Browse other questions tagged or ask your own question.