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Author: 4thebird Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121341  
Subject: Helping family Date: 5/21/2012 2:58 PM
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At what point do you have to file as a professional? I am investing for my family and managing several accounts. My payment is a smile. any ideas?
Also I do not expect to get any money after they die. The took care of me so I am taking care of them.
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Author: irasmilo Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 116163 of 121341
Subject: Re: Helping family Date: 5/21/2012 3:34 PM
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At what point do you have to file as a professional? I am investing for my family and managing several accounts. My payment is a smile. any ideas?
Also I do not expect to get any money after they die. The took care of me so I am taking care of them.


While brevity may be soul of wit, it sometimes leaves much confusion in its wake. "File" what as a professional? And what type of professional - tax preparer, investment advisor, other?

Ira

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Author: 4thebird Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 116165 of 121341
Subject: Re: Helping family Date: 5/21/2012 10:32 PM
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While brevity may be soul of wit, it sometimes leaves much confusion in its wake. "File" what as a professional? And what type of professional - tax preparer, investment advisor, other?

Ira
++++++++++++++++++++

yes you are correct. I do it all for the family members. Still amazes me that I am doing it, kind of fell into the job by accident. I have the power of atturney for all stock accounts. what I do for each member is walk them through each investment and why I am buying it and at what price. like today it was RNF, everyone was getting a little. buy range of $22.55 to $22.75. nice day for trading. all in the group get their tax returns done too.

The only thing I do extra is, if I run into a tax problem I can not solve. Such problems I bounce off you guys and also the local CPA who is a lot of fun to pick his brains.

the original question was: how many clients do you need before you have to file and say you are a professional? considering the pay "a smile". I have never considered myself a professional.

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Author: TMFPMarti Big funky green star, 20000 posts Home Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 116166 of 121341
Subject: Re: Helping family Date: 5/21/2012 11:17 PM
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the original question was: how many clients do you need before you have to file and say you are a professional? considering the pay "a smile". I have never considered myself a professional.

Add editor to that list. Ira asked "do what?" and you said "it." So, for the sake of brevity let's assume you're asking about both investment management and tax prep.

On the tax prep side, "professional" is meaningless. One would hope you're professional in all you do. You can do as many returns as you like for free without any kind of registration with the IRS. You should check to see if your state has any requirements regarding free preparers.

As for the rest of it, you need to talk to a securities lawyer yesterday. I don't have a good feeling about what you're doing as it relates to securities law. I may be totally wrong, but were I you I'd find out.

Phil
Rule Your Retirement Home Fool

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Author: irasmilo Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 116167 of 121341
Subject: Re: Helping family Date: 5/21/2012 11:23 PM
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As for the rest of it, you need to talk to a securities lawyer yesterday. I don't have a good feeling about what you're doing as it relates to securities law. I may be totally wrong, but were I you I'd find out.

There are usually exceptions based on number of clients and amount of assets under management, but the limits are set by each state independently and you are considered to be subject to the jurisdiction of any state where you are located (residence or office) or where any client resides. I second Phil's advice to seek out a securities lawyer for advice.

Ira

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Author: Crosenfield Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 116168 of 121341
Subject: Re: Helping family Date: 5/22/2012 1:36 PM
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The point where this gets iffy is where you got power of attorney over other people's accounts.

If they chose to send you their brokerage statements, and you from time to time when there was money in the account, would recommend a particular stocik and they put in the order, I believe you'd be fine. But where you are acting as a money manager and YOU have discretion over their accounts, even if one client, you may, depending on regulations in your state, require a license.

What if you had recommended Facebook on the IPO, amid all the publicity, and your relatives are losing money? They could come after you saying that was speculative and not appropriate for their circumstances. If you were licensed, you'd know of the obligation to "know your client" and to act in the best interests of the client.

Now, if a court has declared a relative incompetent and you are their guardian, that is also a somewhat different kettle of fish.

I'd back away from this situation to the point of having your relatives place their own orders, if they are physically able to do so. If they aren't, perhaps you need to be a court-appointed guardian?

Best wishes, Chris

Who is not a lawyer but does help relatives pick stocks.

AND talk to a lawyer in the securities field.

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Author: 4thebird Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 116172 of 121341
Subject: Re: Helping family Date: 5/22/2012 9:52 PM
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As for the rest of it, you need to talk to a securities lawyer yesterday. I don't have a good feeling about what you're doing as it relates to securities law. I may be totally wrong, but were I you I'd find out.

++++++++++++++++++

A person or organization employed by an individual or mutual fund to manage assets or provide investment advice. also called advisor or financial advisor or investment advisor or investment counsel. sometimes spelled adviser.

so I am covered for I get no pay.

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Author: JeanDavid Big gold star, 5000 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 116175 of 121341
Subject: Re: Helping family Date: 5/23/2012 7:55 AM
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so I am covered for I get no pay.

If I make a lot of copies of a copyrighted work and give them away free, I can still be prosecuted for copyright infringement. The lack of pay is not a defense.

I am clearly not an attorney, but it seems to me in a case like this, you should procure the opinion of someone who is, one specializing in the field of securities law.

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Author: irasmilo Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 116176 of 121341
Subject: Re: Helping family Date: 5/23/2012 8:01 AM
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A person or organization employed by an individual or mutual fund to manage assets or provide investment advice. also called advisor or financial advisor or investment advisor or investment counsel. sometimes spelled adviser.

so I am covered for I get no pay.


I don't know where you found that definition, but if it isn't from a state's official website, it isn't worth the electrons that generated the image on your screen.

Ira

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Author: Wradical Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 116178 of 121341
Subject: Re: Helping family Date: 5/23/2012 11:48 AM
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A person or organization employed by an individual or mutual fund to manage assets or provide investment advice. also called advisor or financial advisor or investment advisor or investment counsel. sometimes spelled adviser.

so I am covered for I get no pay.
===================================
I don't know where you found that definition, but if it isn't from a state's official website, it isn't worth the electrons that generated the image on your screen.

Ira

===================================
As to the requirement to register as an investment advisor (RIA) with the SEC, you appear to be exempt under the Family Office exemption. And yes, you probably are a family office whether you knew if or not. That's good actually. As long as you dont' hold yourself out to the public as an investment professional, and only work on behalf of family members, it appears you're exempt from registration. This exemption was repealed by the Dodd-Frank act, but then restored more recently.

This bulletin article covers it fairly well.
http://www.natlawreview.com/article/sec-adopts-final-definit...

Ira is right, you should check with your state's securities commissioner's office (or whatever they call it.) Though I suspect there's probably a family exemption there, too, or one based on a minimal number of clients.

Bill

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Author: ptheland Big gold star, 5000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 116179 of 121341
Subject: Re: Helping family Date: 5/23/2012 12:11 PM
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so I am covered for I get no pay.

You're asking legal questions on a tax board. I doubt if anyone here is qualified to answer your question. And if they were truly qualified, they probably wouldn't, as it would amount to giving legal advice without really asking enough questions to determine the correct answer.

The best answer is the one you've gotten over and over: You need to talk to a securities lawyer in your state.

--Peter

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Author: 4thebird Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 116180 of 121341
Subject: Re: Helping family Date: 5/23/2012 9:01 PM
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The best answer is the one you've gotten over and over: You need to talk to a securities lawyer in your state

+++++++++++

did and I am OK. I have to have at least 20 people and there is NO way I am going to do that. the few I help is enough thank you very much.

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