Investment Analysis Tools
Chapters in this video
- 0:00 The no-hypothetical-projections wall and its one door
- 1:43 Defining the interactive analysis tool and Monte Carlo
- 2:41 Why static brochures and group pitches automatically fail
- 3:42 Customer in the driver's seat: the individualized-input test
- 4:10 The five required disclosures and written narrative form
- 5:13 The prescribed "hypothetical in nature" disclaimer language
- 5:45 Rapid-fire exam recap and the static-PDF trap
What this video covers
- Why broker-dealers (BDs) are generally prohibited from showing hypothetical projections, and why the analysis-tool rule is the exception, not the rule
- What qualifies as an investment analysis tool, including interactive technological tools that run simulations and statistical analyses such as Monte Carlo simulations
- The five required disclosures: criteria and methodology, results vary, universe of investments, favored securities, and similar or superior alternatives
- The prescribed hypothetical disclaimer language, specifically the phrases "hypothetical in nature" and "not guarantees of future results"
- Why disclosures must be in written narrative form, and why a chart, pie graphic, or infographic by itself fails the rule
- The interactive requirement: one-on-one use with individualized results based on the customer's own inputs
- Why static formats (pre-made brochures, marketing presentations to a room, email attachments with model portfolios) never qualify, even with a perfect disclaimer attached
Read the full lesson, free
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