Image Credit: Alex Nabaum
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.
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This article was originally published on The Wall Street Journal.
Further reading
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
SEC proposed rule, “Investment Adviser Advertisements…,” Nov. 4, 2019
SEC adopted rule, “Advertisements by Investment Advisers,” Nov. 1, 1961 (see p. 10548)