Question of the Week

Michael Feinberg sends a memo to his star investment advisor, Lee Friendly. In the memo Michael includes charts and graphs that illustrate the success of one of the company's proprietary mutual funds. Does this constitute advertising?

a) No, Michael is only sending this communication to one person: an employee.
b) If it were sent over the internet it would be considered advertising.
c) Yes, Michael is advertising to Lee.
d) Yes, it is an in-house ad for a company fund.

Answer:

The correct answer is a).

Consider the intended target audience when deciding if a communication constitutes advertising. Under the Investment Advisor's Act of 1940, a memo, brochure, email, etc. is considered advertising if it is intended to reach more than one person. Michael's email to Lee is an informative communication intended for one person and, therefore, is not considered advertising.
Financial Professionals
  1. the general ledger is the record of a company's entire financial transaction history.
    Investing

    What's a General Ledger?

  2. Several things factor into the salary of a financial advisor. Here's a look.
    Investing Basics

    How Much Does A Financial Advisor Earn?

  3. These 5 strategies offer financial advisors a blueprint on how to grow their practices.
    Professionals

    Growth Strategies For Financial Advisors

  4. If you're considering investing in China and want to know when to buy, sell, hold or stay away, consider these economic indicators.
    Economics

    Eyeing China? Consider These Economic Indicators

  5. Whether you're a saver or a financial advisor who want to give their clients a leg up, these 8 tips are essential for financial planning.
    Investing Basics

    8 Essential Tips For Retirement Saving