Personal Injury Law

Credentials Marketing Limitations ? FINRA Still Missed the Mark

By Rod Heggy

One of my earlier experiences with advertising material regulation was the time the NASD refused to approve an advertisement by a registered representative that contained a cartoon with a caption that read ?We put the boots on the bull.? The cartoon displayed a Texas longhorn wearing boots. The NASD?s refusal was that they could not determine from the cartoon and caption what expertise the registered representative was claiming. In other words, in past eras, NASD advertising materials regulation has largely been arbitrary and without substantive principles to guide it. The NASD seemed to have no trouble in that same era with Merrill Lynch?s logo which incorporated a bull (but not a Texas longhorn).

FINRA Regulatory Notice 08-27 seems to focus on the advertising materials created by ghost writers and professional advertisers designed to give the appearance of credentials based on book writing, article writing, and newsletters. Of course, while this might be a serious subject, it still does not address the real issue: what constitutes a ?credential? for a registered representative?

The main worry of the FINRA Regulatory Notice seems to be that the ghost written materials imply the registered representative is the author ?and therefore an expert.? I hate to break this too harshly to FINRA, but every registered representative claims to be an ?expert.? What customer wants a registered representative that is not an ?expert?? Of course, making the claim by creating false credentials or false marketing materials is fraudulent. Nevertheless, because the industry refused to definitively define what constituted a ?credential,? and continues that proud tradition, claiming to be an expert will continue.

By the way, if one is searching for a ghost writer to create marketing materials for financial services to individuals, I have had the privilege to know a couple of the best. The disclaimer included in their materials that the financial executive is not the sole author of the materials is often overlooked by the prospective customer that wants to hear what they want to hear.

Full post as published by Terra Extraneus on June 05, 2008 (boomark / email).