IAC Welcomes Eric Peters

Eric Peters joined the Investor Advocacy Clinic “to be as practice-ready as possible when I graduate law school.”  A graduate of the University of Georgia with a double major in finance and real estate, Peters plans to “use the financial and legal knowledge I gained from both my undergraduate and GSU Law experiences to find his passion in the law.

According to Peters, the Investor Advocacy Clinic

“provides a valuable, cost-free alternative to investors who have been wronged but cannot afford adequate legal representation.  The clinic also serves to help investors navigate their way through financial information by creating educational material.  Knowledge is half the battle when seeing to prevent investor harm, and education is a great way to further develop their financial literacy.”

Investor Advocacy Clinic, Secretary of State Office Develop Valuable Resources About Robo-Advisers

Through its partnership with the Securities Division of the Office of the Secretary of State, Georgia State Law’s Investor Advocacy Clinic (IAC) enhanced investor education with students tackling a cutting-edge technology issue that impacts the security industry – robo-advisers – and creating a resource library.

The securities division partnered with the North American Securities Administrators Association (NASAA) to learn more about these tools, and the clinic played a critical role in evaluating the pros and cons of robo-advising. Under the direction of Nicole G. Iannarone, assistant clinical professor and clinic director, students compiled and analyzed information relating to robo-advisers, which are investment management programs that select and manage individual portfolios.

Robo-advisers, previously called “internet advisers,” have changed significantly since they were introduced approximately 15 years ago. The products have gained in popularity in recent years, but there is relatively little educational and impartial information available. The algorithm-driven digital tools provide investment advisory services to consumers, often without any human interaction.

“Several legal questions arise as potential investors, financial advisers and regulators learn how to navigate this shift in financial investing through robo-advisers. Since the human interaction is diminished, the duties held by the investor and adviser are not as clear,” said Noula Zaharis, director of the Securities & Charities Division. “Legal questions, specifically about fiduciary duty, will continue to arise as robo-advisers become more prevalent.”

Qudsia Shafiq (J.D. ’18) and Majda Muhic (J.D. ’17) worked with the securities division and handled investigatory matters.

“Through general research, Majda and I determined the different business models under which robo-advisers operate and how they function within the financial industry,” Shafiq said. “We also identified key players and looked for potentially problematic regulatory issues and any arguments proposing robo-advisers as fulfilling – or failing to fulfill – their fiduciary duty to their clients.”

Based on their research findings, Shafiq and Muhic co-wrote a series of 11 articles for the IAC blog to help consumers understand what robo-advisers are, explain the fiduciary duty robo-advisers owe their clients and highlight the benefits, downfalls and key considerations for using this type of financial product.

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Investor Advocacy Clinic Joins Comment Advocating for Financial Support of Clinics

FINRA recently requested comments on its engagement initiatives, which include investor education and outreach.  In response to the request for comments, the Georgia State Law Investor Advocacy Clinic joined with twelve other clinical professors to request that FINRA ensure its engagement programs support clinics that offer investors free legal services in disputes with their brokers.

The comment letter, available in full here, advocates for financial support of law school securities arbitration clinics.  The clinics began twenty years ago after regulators recognized that investors will smaller claims were unable to obtain legal advice.  Securities arbitration clinics fill this gap in representation.  In addition to representing investors in FINRA proceedings, securities arbitration clinics engage in important investor education work and collaborate with regulators to identify and solve problems unique to small investors.  Securities arbitration clinics are not able to ensure that all small investors receive assistance, and additional funding is necessary for them to help the investing public.

Opening Your First Brokerage Account: Am I Picking the Right Account Type for My Needs?

By Geoff Hafer, Spring 2017 Student Intern

In the last edition of the five-part series “Opening Your First Brokerage Account” we addressed the question “Do I really know all the fees associated with my account?”  Today, we will attempt to answer the question “Am I picking the right account type for my needs?”   To begin with, most brokerage firms offer at least two types of accounts, a cash account and a margin loan account (known as a margin account).

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Opening Your First Brokerage Account: Did I Ask the Right Questions?

By Geoff Hafer, Spring 2017 Student Intern

In our last edition of the five-part series “Opening Your First Brokerage Account” we addressed the question “Am I Picking the Right Account Type for My Needs?”  In this final edition, we will consider the question “Did I ask the right questions?”   Asking the right questions will help you to invest wisely and avoid potential pitfalls.  No matter what your level of investing experience, don’t be too quick to sign, after all it’s your money!

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Opening Your First Brokerage Account: Do I Really Know all the Fees Associated with My Account?

By Geoff Hafer, Spring 2017 Student Intern

In our last post in this five part series on “Opening your first Brokerage Account,” we tackled the question “Who will be managing my account?”  This week we will be addressing the question “Do I really know all the fees associated with my account?”  Investment and brokerage fees can quickly eat into your investment returns.  Whether they’re tied into the funds you’ve selected as an expense ratio, added on as a brokerage commission when you buy or sell, or charged by an adviser who is helping you sort through it all, it’s important that you know what you’re paying.  Here are some of the more common fees to be aware of:

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Opening Your First Brokerage Account: Who will be Managing My Account?

By Geoff Hafer, Spring 2017 Student Intern

In the first part of the series we answered the question, “Did I pick the right broker?”  Today we will address the next question, “Who will be managing my account?”  To answer this question, one must first understand the difference between discretionary and non-discretionary accounts.

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