Investing for finra employees

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unclescrooge
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Investing for finra employees

Post by unclescrooge » Sat Feb 09, 2019 2:57 pm

I was talking to a buddy of mine last week and it turns out his 400k IRA was in 50% Amazon stock and 50% cash. :shock:

He's a management consultant so he can't invest in a bunch of tech companies and his wife works at finra so she can't invest in ANY financial companies with any US exposure.

How do you create a passive portfolio in this situation?

Do you just invest international ETFs that exclude financial stocks?
Last edited by unclescrooge on Sat Feb 09, 2019 4:05 pm, edited 1 time in total.

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ResearchMed
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Re: Investing for finra employees

Post by ResearchMed » Sat Feb 09, 2019 3:01 pm

unclescrooge wrote:
Sat Feb 09, 2019 2:57 pm
I was talking to a buddy of mine last week and it turns out his 400k IRA was in 50% Amazon stock and 50% cash. :shock:

Hens a management consultant so he can't invest in a bunch of tech companies and his wife works at finra so she can't invest in ANY financial companies with any US exposure.

How do you create a passive portfolio in this situation?

Do you just invest international ETFs that exclude financial stocks?
Are they not allowed to invest in very broad index funds?
I'm not familiar with the specifics of those restrictions.

RM
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unclescrooge
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Re: Investing for finra employees

Post by unclescrooge » Sat Feb 09, 2019 3:36 pm

ResearchMed wrote:
Sat Feb 09, 2019 3:01 pm
unclescrooge wrote:
Sat Feb 09, 2019 2:57 pm
I was talking to a buddy of mine last week and it turns out his 400k IRA was in 50% Amazon stock and 50% cash. :shock:

Hens a management consultant so he can't invest in a bunch of tech companies and his wife works at finra so she can't invest in ANY financial companies with any US exposure.

How do you create a passive portfolio in this situation?

Do you just invest international ETFs that exclude financial stocks?
Are they not allowed to invest in very broad index funds?
I'm not familiar with the specifics of those restrictions.

RM
Didn't sound like it. Any equity, debt, derivative or structured product from that firm is prohibited.

BarbBrooklyn
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Re: Investing for finra employees

Post by BarbBrooklyn » Sat Feb 09, 2019 3:39 pm

FINRA employees are allowed to own mutual funds, but not individual stocks. I have a close relative who works for them.
BarbBrooklyn | "The enemy of a good plan is the dream of a perfect plan."

retiredjg
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Re: Investing for finra employees

Post by retiredjg » Sat Feb 09, 2019 4:02 pm

I think your buddy is confused, at least about what a FINRA employee can invest in. An internet search indicates they have a pretty normal looking 401k at Vanguard. Brightscope rated it and list a few of the funds available - including 500 index institutional index and some target funds.

Maybe he's confused about what he can invest in as well.

BarbBrooklyn
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Re: Investing for finra employees

Post by BarbBrooklyn » Sat Feb 09, 2019 4:37 pm

retiredjg wrote:
Sat Feb 09, 2019 4:02 pm
I think your buddy is confused, at least about what a FINRA employee can invest in. An internet search indicates they have a pretty normal looking 401k at Vanguard. Brightscope rated it and list a few of the funds available - including 500 index institutional index and some target funds.

Maybe he's confused about what he can invest in as well.
+1
BarbBrooklyn | "The enemy of a good plan is the dream of a perfect plan."

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unclescrooge
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Re: Investing for finra employees

Post by unclescrooge » Sun Feb 10, 2019 11:24 am

retiredjg wrote:
Sat Feb 09, 2019 4:02 pm
I think your buddy is confused, at least about what a FINRA employee can invest in. An internet search indicates they have a pretty normal looking 401k at Vanguard. Brightscope rated it and list a few of the funds available - including 500 index institutional index and some target funds.

Maybe he's confused about what he can invest in as well.
Yup, you're right. His wife's situation is as described, it's his situation that is complex. Apart from a different prohibited list, he needs pre-authorization on every purchase, sale or rebalance.

retiredjg
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Re: Investing for finra employees

Post by retiredjg » Sun Feb 10, 2019 11:49 am

Well, the best advice you can give him (assuming he is looking for advice) is to get some diversification in his $400k IRA no matter what he has to do to get it. What he is holding is completely nuts.

123
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Re: Investing for finra employees

Post by 123 » Sun Feb 10, 2019 1:07 pm

The guidelines for finra employee investments: https://www.finra.org/about/investment- ... de-conduct
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