Is it true that the NASD has issued warnings to brokers that advise their clients to refinance their houses and invest the equity into securities?
Yes, in March of 2004 the NASD issued a warning to all of its members. In essence, they warned against advisors recommending that their clients take equity out of their houses and invest it in securities. The Mead/Taylor Financial Group applauds the NASD for taking this position as many Financial Professionals were placing their clients in questionable investments. A close reading of the regulations does not prohibit a Financial Professional from; (a) investing money for a client when that client comes to them with their home equity, or (b) placing a clients funds in an investment wherein the principal is not subject to a downturn in the economy and the returns are guaranteed. To see a NASD response, click here.
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