Why can’t my Schaeffer's representative provide me with personalized advice?

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Overview of the Law

Schaeffer’s operates under a publishers’ exemption from the US Securities and Exchange Commission (SEC), meaning we are not required to register with the commission. To summarize what this means for us: We may not under any circumstances give personal investment advice to anyone. “Personal investment advice” means any information that relates to investments, securities, markets, money management, or financial matters that is not the verbatim text of the company’s recommendations or other published materials. It is illegal to provide investment advice unless you and your company are registered with the SEC.

The Investment Advisers Act of 1940: Details of the Law
This law prohibits any person from “advising others, either directly or through publications or writings, as to the value of securities or as to the advisability of investing in, purchasing, or selling securities, or … [providing] … analyses or reports concerning securities.”

  • Security is defined broadly and technically to include stocks, bonds, options, and other traditional securities, but also virtually anything else that someone might invest in.
  • Advising is defined as providing virtually any kind of personalized information.
  • Providing information about virtually any kind of investment without the appropriate licenses (both for the account manager and for the company the account manager represents) likely violates both federal and state law.

The Publishers’ Exemption can be found in Section 202 (a)(11)(D) of the Investment Advisers Act of 1940 and states that “the publisher of any bona fide newspaper, news magazine or business or financial publication of general and regular circulation” does not need to register with the SEC.

  • Publications are bona fide when they are “published by those engaged solely in the publishing business and are not personal communications masquerading in the clothing of newspapers, news magazines, or financial publications” and “communications with subscribers must remain entirely impersonal and not develop into the kind of fiduciary, person-to-person relationships that are characteristic of investment advisor-client relationships.”

Schaeffer’s Policy
Schaeffer’s company policy absolutely prohibits providing any non-published information to third parties about any investments, securities, markets, money, or financial matters. All information distributed on these matters must be published by SIR.

Here is our official company disclosure:

“Schaeffer’s Investment Research (“SIR” or “we” or “us”) is not registered as an investment adviser. SIR relies upon the “publishers’ exclusion” from the definition of investment adviser under Section 202 (a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. As such, SIR does not offer or provide personalized advice. We publish information about companies in which we believe our readers may be interested and this information reflects our sincere opinions. The information that we provide or that is derived from our website is not intended to be and should not be construed in any manner whatsoever as, personalized advice.”

If you have any additional questions, please contact us and we would be happy to clarify any points of confusion.

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