Earlier we wrote about how to tell if your financial advisor is really “fee-only” by using the Securities and Exchange Commission’s (SEC’s) required online reporting site.

We use a unique email address for compliance which is only used and listed on this site. We do that to ensure that this email always accepts email that it is sent. We would not want to miss any critical compliance communications from the SEC.

One of the problems with government reporting regulations is that personal information is made widely available to everyone and therefore open for abuse.

Most recently we have been receiving spam by various companies marketing to Registered Investment Advisors (RIAs). These companies have purchased a database list of Registered Investment Advisors from the Financial Media Group.

Personally, I think collecting and selling the government-required compliance emails of the Chief Compliance Officers of RIAs is morally wrong and possibly illegal. Selling an email list to someone you know is using it for spam can make you guilty of conspiracy under the CAN-SPAM Act of 2003. By including email address, The Financial Media Group is encouraging the spamming process. I am more than willing to confirm that spamming is how some of their customers are indeed using the list. The best way to avoid legal problems is to collect email addresses only from people who opt-in for the kind of email that will be sent by the list purchaser.

Additionally, they are selling a list of email addresses that they have collected without the permission of the people on the list. I called the Financial Media Group, and they implied that they are getting their information in a machine readable format. I would like to know who is providing them that information: FINRA or the SEC? In either case, I think they should not be allowed to receive that information as a database dump from a government-required compliance source. I would like to know how the information is collected by the Financial Media Group and how that ability can be restricted.

For those spammed by this process, here is the email I send in response:

Please remove [MY COMPLIANCE EMAIL] from all of your databases and never email that email again.

The only way to get that email is by taking it from the SEC website, a practice which I abhor and for which I refuse to consider products.

I am surprised to find your company among those who use this practice and spam compliance emails. I would normally have thought better of your company.

I would like you to raise this issue to your management and get to the bottom of how and why your company came to be using this email. I am hopeful that it will change your company’s marketing model. If you rented or bought the email list you used I believe that you should ask for double your money back on account of fraud (they did not have the right to sell you this email) and lost good will (I will now refuse to even consider your services until I hear an explanation and an apology). And 30-days after sending this email if I still haven’t heard a satisfactory explanation I will being to tell the story of your company to every advisor at my discretion.

If you did purchase this email address, please let me know which company you purchased the email address from. I would like to contact them as well.

Regards,

Please feel free to use this email as a model for your own canned response.

Many companies have apologized for, and regretted purchasing the list of Registered Investment Advisors from the Financial Media Group. They have raised the issue with their management and, hopefully, won’t do business with the Financial Media Group again. I contacted the Financial Media Group and requested that they remove my information from their database. They did not assure me that they would do that, and they refused to comment on the moral, ethical, or legal judgements of their business model.

Here are the issues I hope this article raises:

1. Government-Required Regulation can destroy privacy. I’ve seen personal Social Security numbers displayed on the PDFs in government archives. And I know that our local county clerks peruse individual taxpayers federal tax returns with inadequate access controls.
2. FINRA and the SEC are not adequately securing the information they collect. They should not allow the wholesale collection of the entire database of 35,000+ RIAs.
3. The Financial Media Group should cease their entire business model. At a minimum they should remove compliance emails from what they are selling or require those purchasing the list to sign a pledge not to use compliance emails to send unsolicited sales inquiries.
4. Legitimate businesses should not purchase from companies such as the Financial Media Group. At a minimum they should not use compliance emails to send unsolicited messages to Chief Compliance Officers.
5. And finally, RIA Chief Compliance Officers should refuse to do business with companies using compliance emails in their marketing. Instead, send an email similar to my email above and keep a list of companies who are abusing the government-required compliance information.

Please, think twice before purchasing any database and sending unsolicited emails.

Here is the Financial Media Group’s marketing pitch:

At least with other Big Data collectors I can choose not to provide them with information by refusing to use their services. I should be able to opt out of my FINRA and SEC data being sold.

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