Advisor newsletters: Compliance-wise, all news may not be fit to print

I’m confused. When it comes to articles, the main reason to hire a ghostwriter, copywriter, freelancer or editors is to have them use their writing expertise for your benefit. They can create articles for you, anywhere from scratch, to fixing something you wrote a draft of.

The whole reason to hire a ghost writer, for example, is to have them take their expertise (writing and researching) and take the topic you want to highlight, and write about the topic. Their contracts clearly state that upon payment, the article is yours to do what you wish. It’s your name that goes on the article, not theirs.

While the article, ebook, or book is being written, you approve it’s contents. Usually there are a few re-writes included in the price you pay.

Why should that information have to be disclosed? It’s kinda like having to disclose that you hired a coach to help you grow your business, or that an accountant named “x” takes care of your book keeping or taxes. Can you provide me with the rule regarding this?

It can imply you have knowledge or expertise that you may not have and it can be seen as misleading. Also, what if it implies you did research you didn’t do?

So many advisors I know seem inclined to apologize for not doing everything themselves – as though there isn’t a value-add from making the effort to find that solid market intelligence and share. It’s not a big deal to put something along the lines of “contents created by X and used with permission by ABC firm” and the reality is few clients look askance at a newsletter that credits a third party author.

I have seen at least two deficiency letters that criticized an RIA for not disclosing that the adviser used a ghostwriter or freelance journalist to write newsletters and books. These critical comments were based on Rule 206(4)-1 under the Investment Advisers Act, which prohibits false or misleading advertisements.

On many occasions, advisers write articles and books to show prospective clients that they are extremely knowledgeable and to demonstrate their investment expertise. If someone else wrote those materials, a prospective client will be misled.

I believe securities regulators are far more worried about situations where the ghostwriter or third party wrote the publication from scratch. I doubt that examiners are as concerned when the adviser uses a third party to edit or proof-read a manuscript that the adviser wrote.

Good to know that “I doubt that examiners are as concerned when the adviser uses a third party to edit or proof-read a manuscript that the adviser wrote.”

Thanks Les for the clarification between the editing and writing from scratch.

Again this is one of those areas where “it’s different in the financial arena”. That’s why I recommend that my financial clients only use a professional whose niche is financial to write their marketing materials.

I mean the whole reason a ghostwritter is clled that, is because they write and then disappear, like Casper :)

In every other industry, (including coaching) when you hire a ghostwriter, etc. to write a piece from scratch they give you first rights of ownership for the “piece” they’ve written. I’ve used a ghostwriter from time to time. Usually it’s when I’m too busy to write a piece but I needed it written for a column or someone’s book. I provide my ghostwriter with the overall information and topic that I want them to write about, then they do more research and write it. I pay them and they give me ownership of the article.