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Ely
Ely, Counselor at Law
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Can I offer stock picks online via website for money without

Resolved Question:

Can I offer stock picks online via website for money without being a licensed investment advisor as long as I had a well worded disclaimer or terms of use? I see so many websites offering stock picks without being a registered investment advisor operate for many years.
Submitted: 11 months ago.
Category: Legal
Expert:  Ely replied 11 months ago.
Hello friend. My name is XXXXX XXXXX welcome to JustAnswer. Please note: (1) this is general information only, not legal advice, and, (2) there may be a slight delay between your follow ups and my replies.

The answer is one of those "yes and no" answers. Please, bear with me.

The Investment Advisers Act of 1940 defines an “investment adviser” as anyone who, for compensation engages in the business of advising others about the value of securities or the advisability of investing in, purchasing, or selling securities.

As such, if one charges for access to the information that talks about what stocks to purchase without being properly licensed, then this is giving investment advice, and one is required to be licensed to provide that advice. Not doing so is a violation of the Investment Advisers Act of 1940.

In summary: (1) Giving advice without a license is okay provided one does not charge for it, (2) giving advice for a fee (subscription, etc) is not allowed without a license.

However, the government has been somewhat lax on enforcing this matter, largely out of practicality. Hundreds of individuals have websites and books that advise what stocks to pick for a fee. It is simply impossible to get to them all. The authorities attempt to mainly go after individuals who are malicious and/or scam people.

If the site is free, then this is not a violation. If the site is not free, then technically it may be, although prosecution of such individuals is rare unless they exercise mass fraud, malicious scams, etc.

Finally, "terms of use" and disclaimers really do not add much to this matter, so the answer stands as is.

I hope this clarifies. Good luck.

Please note: I aim to give you genuine information and not necessarily to tell you only what you wish to hear. Please, rate me on the quality of my information and do not punish me for my honesty. I understand that hearing things less than optimal is not easy, and I empathize.

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Ely, Counselor at Law
Category: Legal
Satisfied Customers: 86625
Experience: Private practice with focus on family, criminal, PI, consumer protection, and business consultation.
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