I would like to offer at least one bit of legal & financial advice, and that’s that you should go all in on smashing the like button. 👍 Thanks for including me in this one, Richard!
So what about the case where you ARE a financial advisor. I'm an advisor and feel like I have to be MUCH more careful and never give anything close to "stock tips" even thought theoretically I might be more qualified than a standard finance youtuber... should I feel more or less free than the average person to share my thoughts...? Thanks for your help on the video!
@@TheMoneyInnovator The question we explored was more about RU-vidrs giving _unregistered_ financial advice. If you're a _registered_ adviser, then that part would seemingly be a non-issue. I do know the SEC has put out some information on registered advisers using social media to market on behalf of their firms that you might want to check out. Definitely check your state laws as well, and consider hiring an attorney if you really want to get to the bottom of it.
In the Netherlands, the financial market authority recently organized an evening for financial RU-vidrs and their opening statement was; "we could arrest all of you right now because every single one of you is breaking the law".
No but they should pay for their courses in which they don't know shit, support them on patreon, and use their code for a discount on some products. In short, grift them
we need less idiots in the world that think they "deserve to be rich" without working at all. the problem are the people. we have 99% idiots in the world
It would be cool if some of the get rich quick schemes were real. But for real I would love to join a private group that for a permeant membership fee I could get a refund.
I think youtubers just highlight a problem that's long existed. NOBODY should be giving financial advice without credentials. That includes news journalist and publications unless the advice is written by a licensed individual. Whomever writes the advice for en masse consumption should also be held liable like their advice was given to their audience as 1vs1 consultation.
@@lostconciousness4255 I don't understand why they don't just tell you to no use the advice. If I choose to use it I also choose to loose over time as well. To me a disclaimer is more than enough but many times they don't say it over and over so people know not to do it no matter what. Telling people something is a bad idea and not to do it seems ok but I would rather they just say: "you will 100% loose all your money if you do this."
What about Jim Cramer on CNBC? He makes stock picks every day. If these big analysts on the big networks aren't held liable, what justification do you have that youtubers be held liable?
its a rare breed, anyone who has a track record of making $$$ and able to market yourself in a way, can use that as a qualification... a buddy of my got a job with a bank(in a group recruitment event) with 0 work experience in finance (and basic bachelors degree in commerce)but his life time portfolio trading records impressed the managers so much that he was the only person in that pool of candidates that was hired without previous work experience. Long story short he ended up quitting the job after a year because it was a waste of his time, he makes more money by not working for the bank... and today he runs some sorta hedge fund thing with another fellow whos in the same realm.
@@anascoinquest1121 it actually is. you can be an 'accredited investor' just by having high enough networth/income. rest of us had to take our series ;)
One of my first stocks i ever bought was an over priced, all time high short squeezed zombie company that was recommended by a RU-vidr. After getting a little burned in that, i pretty much don’t care to follow anyone else’s trades. Everything is on my own DD and strategy. Sad to see so many not willing to do the proper work and blindly follow others with a different financial situation and strategy
Exactly. The worse is we can see them do that on a daily basis - giving unsolicited advice on what to buy and how the market will go. Even an expert in this field barely has the confidence to predict what will happen next to the market, yet there the youtubers are making noise.
Can someone make a ‘finfluencer index’, e.g. take the top [50] finance RU-vid channels which have at least [x]% of last [20] thumbnails giving actionable financial advice, weight by subscriber count and then trade their recommendations? I presume this tanks but would love to see the results.
Well there is the BUZZ ETF, although as its biggest holding is Ford and second biggest is GME (Tesla is only 9th) I don't think it's entirely based on youtubers.
I'm an attorney (not your attorney) and I actually worked for ten years in the securities litigation group of a large law firm, and I wouldn't consider the below analogy any sort of legal argument. But I think it better illustrates to non-lawyers why these exceptions/exemptions are in the law than any formal or informal legal argument would: In a free society we fundamentally hold people accountable for their own judgments, good or bad. If a concert-goer went to see a rock star she's never actually met, and adjudged that the rock star was singing (and had written) a particular love song specifically to and for her, we'd all recognize that that concert-goer was being a little daffy. We wouldn't dream of holding the rock star accountable (legally or otherwise) to the concert-goer for the professions of love made in the lyrics of the song. It's a song put on a record and distributed to the general public for entertainment purposes. It's not a love letter to Frieda. Again, that's not a good legal argument. But it is a good common sense argument, and the root of most legal arguments, and laws, is common sense. It just isn't common sense to hold a RU-vidr accountable to a guy who invests based on a video that is being distributed to 200,000 people, so the law doesn't do so. Although that being said, if 100,000 of those people all make similar investments and blame that video for them, that could point to additional facts that affect what common sense means in those circumstances.
"But it is a good common sense argument, and the root of most legal arguments, and laws, is common sense." AG Merrick Garland, after mango mussolini & Cult 45 incited a riot: "Hold my beer."
what constitutes common sense when the majority of your audience are doing as you suggested? Also, I really feel your example is "apples to orange" comparison. I would think a more apt comparison would be "buy my product, it really works." Lots of people buy it and it craps out at a large failure rate, it would be reasonable to hold the producer accountable for the shoddy product. That's because certain products and the intricacy of how they work really ISN'T common knowledge. Why are here assuming that investment advice is common knowledge, how many of the people actually know what a P/E ratio is? Not saying you are wrong but it's pretty obvious the laws are written with special interest in mind.
Really enjoyed this video and have wondered some of these exact things myself. I think you did a great job of condensing what are inherently complex legal topics into easily digestible terms. I recently passed the Series 65 - the licensing exam required in America to register as an advisor - and much of it deals with the specifics of the IA Act of 1940 that you referenced. I am considering registering as an advisor, even if only to legitimize myself further as an author and content creator and to explicitly separate myself a bit more from the typical "buy this stock pick at $X" RU-vidrs who are unfortunately far too common. Keep up the good work!
gerry gensler has been hiding under his desk after saying there was no market manipulation in the gamestop fiasco...they took data a month before the short squeeze not during or after
@@timchow924 I have never heard those two promote any shady coins though. I do remember when Graham met Dan Lock though and displayed him like he was legit. I don’t know if Dan Lock is legit but the generals consensus seems to be no.
@@timchow924 I'm not sure the legal frameworks are there for cryptocurrency. Considering outright pump and dump scans aren't technically even illegal in that space...
A lot of these RU-vidrs only try to funnel to their courses. Meet Kevin is a big buy my course guy he just has more charisma so people give him benefit of the doubt
@Imran A I agree however Graham Is left out because he doesn’t sell a stock course. He only has the real estate agent and youtube course and he’s an expert in both of those.
Breaking the laws ain’t too sure but frauds? Def yes. The most gross ones are easily Larry Jones, Chris Sain, Stock Moe and Kenan Grace. Three of them actually did a group stream recently
@@dundermifflin5465 stock moe has no accountability. Hes a hedge fund manager just because he says so? Don’t trust that guy. He shows no portfolio except in excel form. If it’s up to me, he’s def not an ex hedge fund manager. Just listen to what he says, it’s all lame layman opinions and he knows nothing about technical analysis which is a big red flag. Stock moe is easily the biggest liar. He’s just interested in youtube views and money
There’s always a need to differentiate between content creators and educated folks that know the risk associated with throwing out “not financial advice”.
i hate those fake financial adviser giving investment tip and claim not financial advice. Also, they try to sell investment course, seeking donation, subscription....
what I don't understand is when they get at least somewhat successful, it would take a few weeks of work at most to actually get certified, yet most can't be bothered to do even that.
I used to be a financial advisor - I'd like to point out having your financial licensees makes it Illegal for you to give blanked advice like in a newsletter - at least depending on which financial liscense you hold - For example Suzy Orman had to drop her finical licensees to do her news show. The problem is everyone situation is different so if I gave advice to you it might be catastrophic for someone else, even though it was perfect for you. It's significantly better for your to NOT hold any licenses if you're going to do any type of public speaking on finance. One of the reasons I dropped my licenses was I got asked to teach a course at a local community college and it took over 6 months to get approval from the legal team at my firm - I ended up not being able to teach the course since it took so long to get official legal approval to do so. You might not have those obstacles if you have your own family office, but if you have your securities license and you make a small mistake you'll be prosecuted to the fullest extent of the law with no exceptions. If you do not, to a large extent though the "not financial advice" disclaimer isn't exactly valid - you can say the video was strictly for entertainment purposes and under that aspect you CAN say whatever you want - you are even allowed to destroy currency legally for entertainment purposes in certain circumstances - such as a magic trick. ^^ don't forget about your right to free speech as well - it's one thing to be running a fraud scam or yell fire in a crowd, but you're allowed to have strong opinions and make videos about them - even if it is "financial advice" the same way political pundants can make up fake news stories to get a reaction from their audience. Like it's not illegal for you to talk to a friend and say you should really buy some bitcoin, or gold, or a specific stock (so long as it isn't insider trading) If you DO NOT hold a license you have significantly more freedom to say what you want since it's not assumed you are acting in a "fiduciary" role
I was thinking this because I noticed allot of people who do hold licenses don’t seem to have any opinion at all. It’s like well the people you would like to know what they think are trapped, and the others who aren’t necessary train professionals h might have knowledge but can’t back it up with a license
I get that there are larger concerns here, but it seems pretty ridiculous to me that I can sue someone for suggesting a stock to me that declines in value. I’m responsible for my own decisions, not them. If someone suggest that I jump off a bridge, and then I do it, is it their fault?
Only if they parade as an advisor without being registered as such, right? So in your metaphor, it would be someone wearing firefighter-like clothing in front of a big red truck telling you to jump off a bridge.
It’s not like being a fire fighter at all. They aren’t posing as financial advisors and they aren’t taking a percentage or getting paid. And personally, I don’t think a piece of paper means anything.
It is up to every individual investor to do their own work. I appreciate MOST creators for ideas and nothing more ... just like if I was hanging around a stock exchange getting advice or tips or inside info ... buyer beware. If you take all of this away ... I am stuck with the suits and FILTERED info and who the H---- knows where that is coming from and why. Or I can just hand all of my money over to a 'guy' and 'trust' him ... or her ... to do what is best ... and where are they getting their information? Remember Bernie Madoff and how LONG it took them to finally take him down. Just don't be a fool.
Watching RU-vid videos feels like free advice even if the creator makes ad revenue off the video. It's much more like listening to a friend's opinion than getting guidance from a paid financial advisor.
While it may not impose any obvious danger to the part of the viewers, one wrong financial advice coming from people who are not licensed to do it may cause us a lot of fortune without us knowing and covering it up by taking the blame for the wrong blow.
You make some great points here. Many things I did not think about or perceive the same way you did even though I was formerly registered here in the U.S. The newsletter exemption I believe is the best support for why the SEC hasn't cracked down. Also the fact that you are not being paid directly for the advice or by viewers (assuming no Patreon). You are being paid by a third party compensating for views changes things significantly. In terms of whether or not I think there should be more regulation I am torn. Often times you see the well thought out well researched smart recommendations get very little views and the YOLO recommendations "buy this because I think I think I think I feel I feel I feel" get much higher numbers of views. That is concerning. But at the same time if you want to take advice from an unverified, non-credentialed stranger on the internet I think you should be able to do that.
In the UK, the Financial Conduct Authority differentiates advice and guidance. It states that advice is personal to an individual and specific to their own financial circumstances. Only registered firms can offer this. Guidance on the other hand is general information on types of investments, what to look out for, options - Anyone can give guidance. Quite separately, Promoting Ponzi Schemes is very illegal in the UK (Most of these Node projects right now!)
Fantastic video, funny timing because I recently (last few days) made a video where I talked about where I get my investment information from RU-vid, I talked about channels I said that were good & bad (yours was one of the good ones obviously) and in my not-so-good channels I had actually mentioned the clickbait of financial RU-vidrs (I also mentioned it in some of the good channels too) and how they think they’re qualified to talk about this stuff, I was hoping that it was going to be illegal for them to do this clickbait bullshit we all see, but alas, it seems the clickbait will go on Another fantastic video from The Plain Bagel
You know what? I appreciate that you’re so cautious about how you go about presenting information, and acknowledging that you don’t know everything, but still acknowledge you have some footing. It’s nice to see, wish it was more common, cause it’s so common to see a lot of commands, calls to action, reasons to be mad, so seeing someone calmly and rationally present information is something I appreciate, as well as you lampshading when it comes to things that should be approached with more caution.
Very intriguing video. Glad you made it. I’ve often had the same thought. I am glad that what they are doing is legal because I am interested in learning opinions on the market, but it does make me nervous that they can influence some people easily
Is Jim Cramer breaking the law by giving stock picks every day on CNBC, a much bigger platform than pretty much any youtuber has? If Cramer isn't responsible for your losses, why should RU-vidrs be?
Newspapers and TV also give "not financial advice" for centuries and they always got away with it. It should not be different for individuals that want to blog or vlog about it. The rule doesn't exist to protect the audience but the legally allowed professionals that invested time and money getting certified, so they could have exclusivity to do that. It's like you may be competent to defend yourself in a court of law but the legal system might bar you from doing so, forcing you to hire someone...
@@klobiforpresident2254 Oh, I didn't mean US. In Brazil (and other countries) you can't represent yourself in many circumstances. I have a law degree but since I didn't take the BAR, even I can't represent myself over there as well (except for small claims court). I am not sure that you can represent yourself in any court in the US, to be honest. We all see criminal cases where you can defend yourself, but is that also applicable to civil cases, and others? I also know that, in Brazil, if you make "enough" money to feed yourself they won't give you free legal and you must pay for it (even if it bankrupts you).
@@TheSimArchitect Well, I don't know about the U.S. or Brazilian systems. I know that where I live it is possible to represent oneself in criminal and civil cases.
Freedom of speech is something most people understand intuitively but struggle to articulate in rational terms. They usually know when their freedom to speak is being infringed, but explaining why or how ends with them accepting some form of control, or on some tangent that has nothing to do with their right to speak. The right to talk about investing, trading, or anything finance related is one we all have by nature; it is not given to us by anyone or anything, nor is permission required. Modern finance law, especially in the US, puts the right to speak at odds with government power. The fact that this is true sends shivers down my spine...as it should every reasonable person. So, if everyone has the right to speak their mind on finance how do we know what the truth is? The same way you know what the truth is about anything you are interested in: think for yourself. Do your own thinking. Explore, organize, differentiate, integrate...in your own terms. Knowing the subject in your own terms will make your BS filter that much better. Don't believe for an instant that the government can keep you safe from your own non-effort...they cannot protect you from your habit of avoiding the effort to think. If you do not want to think about finance but really need to, think about finding a finance professional. Just as being a professional in finance does not necessarily make your advice on plumbing wrong, being a plumber does not necessarily make your advice on finance wrong. The proof is in the truth of the advice itself, not in the messenger. Choosing a finance professional increases the odds that (s)he knows more about finance than plumbing, just as hiring a plumber increases your chances of a proper plumbing repair. Comparing one finance professional to another increases your chance of finding one that will make your investment account value bigger. This all requires thinking, which is a solitary effort and a key requirement for success. Finance laws do not protect you from your own ignorance. They lull you into a false sense of security and leave you struggling to find reasons when you need them the most.
All these financial youtuber seem smart in a bull market, but when the market enters a downturn all of sudden it's "not financial advice" and it's "long term investments bro".
Most "financial advisors" also give bad advice. If you're smart listen to lots of opinions and then try and get a counter opinion on anything you think is "good advice". NO ONE knows everything. I really hope we still have the freedom to listen to the opinions we want.
Jeremy (financial education) is probably the worst for this. All his pumped stocks are down 60+% Can he be secretly sponsored by these companies? Does he have to disclose that? Or what incentive does he have to pump TTCF?
"how could this be?..." it can be because not everyone had the relevant financial regulations beaten into their heads. I'm in the same boat, albeit in a different country, so I completely understand your frustration.
Pretty sure the U.S. constitution doesn't have a clause saying the 1st amendment doesn't apply to financial advice. The only people braking the law here are the SEC.
Freedom of speech doesn't mean freedom from consequence, and thank God for that! It's why it's illegal to threaten people or say you'll kill someone, even though you're exercising your right to say something freely.
@@ThePlainBagel freedom of consequence from government, yes. That's exactly what the amendment says. There is to be NO LAW deminishing your freedom of speech, it is absolute in its intent.
**this is not culinary advice ** but I recommend a bagel from a place called Stoop Kid in Phoenix, Arizona called the Money Shot. Great video! Thanks for your research!
I’m disappointed but I probably shouldn’t be surprised. I honestly thought the rules around financial advice would be a lot stricter. I guess then, all we can say is “Buyer beware.”
As for the people who are starting their investing journey, I hope they land on this video first before taking into account considering believing those contents that convinces them what stocks to buy.
Decentralized education and its risks is far better than letting financial experts who may or may not be particularly interested in letting retail traders and investors make money without directly paying them be gatekeepers of information. Be smart and DYOR, people don't want or need their hands held. * not financial advice
RU-vid lawyers always say "this in not legal advice" even though they may actually be registered lawyers RU-vid doctors always say "this isn't medical advice" even though they are medical doctors.
Series 7/66 guy here. Yes. Yes youtubers are compensated for their advice. The regulations are VERY broad about conpensation, down to even declaring a newly aqcuired friendship as compensation for a stock pick
Loved the video! I have always tried to approach my own content as entertainment for others in the form of me doing my investment work on stream. Never giving recommendations specifically for others, only discussing what I think and what I might do broadly. But even so, I have often wondered where exactly the line is. Fantastic as always!
Look at investment newsletters aka 'Tout sheets.' The only issue is when you have a position you have to disclose it. We have free speech in the US, HOWEVER; you don't direct the information to an individual. IE "Tesla has XYZ peg ratio and has a good chance of out performing the market" vs "Buy (stock name) now and it will go up to (price.)" The later would be financial advice, the prior is simply reporting what is apparent to you. Disclaiming is good as well, but the main thing is disclosing.
I personally listen to some of these guys on RU-vid but it is a combination of entertainment and food for thought for me. Never I took their advices serious enough where I would do anything they would say or buy any of their courses they offer on their channel.
Great video, Richard and Jack. There is a RU-vidr who offers private chats for which he charges money. He is not in any way credentialed so it's blatantly illegal. That said, I like the financial advice he gives so I'm not going to narc on him; I'll leave that to someone else. Always, always, always do your due diligence before acting on the advice of some rando who has set himself up as an Internet guru.
You should be able to conduct yourself reasonably and take responsibility for your own decisions, weather its advice through a registered adviser or a friend, or youtuber, its the individuals personal responsibility to accept the decisions they make.
I want to agree with you on this, but not all people can contemplate and decide on their own, so a slight factor can still come from those people we can hear, including people or youtubers. That's why we should really be wiser when it comes to where we are putting our money into.
The problem is how do you enforce this? If they automated enforcement using something like the RU-vid algorithm people would be going to jail over talking about how they bought SPY in their 401k. AI needs to improve more before we’re ready for it to start enforcing laws. If they just hire a bunch of people to go around policing RU-vid all day our taxes will go up. There’s nothing really feasible to address here…
Great video! As a licensed financial adviser myself, and someone who posts financial content to youtube, this content really hits home and is something I have put a lot of thought into
I agree. While financial adviser's are so careful not to violate any underlying legal provisions, some youtubers/vloggers can just dwell on anything just to gain viewers, but I guess it is because it is fueled by the positive reactions of the viewers.
It is frustrating - as a registered rep I can’t talk about investments on social media or RU-vid. But unregistered folks can do whatever they want basically.
