This article was prepared by Thompson Burton Summer Associate, Brooks Brasfield. He was asked to help clarify the line between financial advice (bad) versus financial education (good).-------------“Don’t turn mailboxes into baseballs… most thoughts deserve two or three more...everything will be fine...long as you stay off the hard stuff and keep between the lines.” Grammy Award-winning artist Sturgill Simpson had his own plan for staying out of trouble back in 2016. Suffice to say, the same applies when it comes to steering clear of regulatory agencies in the direct sales world.My colleague Kevin Thompson has written about the lurking danger that arises when companies combine Forex and MLM. Turns out, he only scratched the surface about the risky waters companies swim in when they offer products and services involving investment securities or other financial products like Forex or Crypto.For those in the direct sales world providing products or services involving securities or the like, the line between “advice” and “education” is murky at best, and without keeping it between the lines, companies put themselves at significant risk of turning mailboxes into baseballs and coming in the crosshairs of the SEC, FTC, or CFTC.Federal law defines an adviser as any person or firm who: (1) for compensation or profit; (2) is engaged in the business of advising others (3) either directly, indirectly, or through publications, writings, or electronic media; (4) as to the value or advisability of trading in securities, foreign currencies, or commodities, among other things. See 15 U.S.C. § 80b-2 2 and 7 U.S.C. § 1a(12)(A) Notice that this covers a wide array of activity—supplying advice or recommendations in any way puts one in the category of an adviser.For those who qualify as advisers, the law imposes a few important requirements: registration, bookkeeping, and fiduciary obligations to clients. Regardless of classification, companies in this space are also subject to anti-fraud provisions, which prohibit false or misleading statements. Failure to follow these regulations can result in significant monetary fines, criminal penalties, and permanent bans from engaging in financial-related services.As always in the law, there are exceptions. Two important exceptions for teachers and publishers help delineate between “advice” and “education.”Teachers who offer advice incidental to their profession are excluded from the definition of adviser. This exception is typically limited to situations where the advice is part of a regularly offered course of study through an accredited school or academic institution. It seems unlikely that many direct sales businesses would qualify. On to the next one.Also excluded are Publishers of bona fide newspapers, news magazines, or other financial publications of regular and general circulation. See 15 U.S.C. § 80b-2(a)(11)(D) (as applied to investment advisers); Ginsburg v. Agora, Inc., 915 F.Supp. 733, 737 (D. Md. 1995) (as applied to commodity trading advisers). To meet this exception, a person or business must meet three significant requirements: their publication (1) must offer only impersonal advice; (2) must be "bona fide," and (3) must be of general and regular circulation. See Lowe v. SEC, 472 U.S. 181 (1985); General Information on the Regulation of Investment Advisers. That’s a lot to unpack, so we’ll take it one at a time. Remember though, it’s crucial that each one of these elements is present in order to avoid classification as an adviser under federal law.Impersonal adviceThis means that the information shared is not personal to the person receiving it. You can’t tailor your message to the individual needs of a specific client, group of clients, or portfolio. “Brooks, you want to retire early, and you have $10 to invest, so you should invest in ¬¬¬¬____” isn’t going to fly. Answering direct questions from customers in a chat room likely won’t either. REPEAT: answering direct questions from customers is (a) frequent, and (b) a problem.Bona Fide Bona fide sounds like legalese, but it has real significance here. The communication must be disinterested commentary or analysis, rather than promotional material. You can’t recommend or tout things that you have a personal interest in. Think more along the lines of “I’ve looked into ____, and here are the reasons I think it is great, or here are the reasons I think it is bound to fail, and I have no personal interest in what I’m sharing with you.”Another important part of the bona fide element is that there is a difference between personal communications and publicly available communications. Without precisely defining the difference, the Supreme Court went as far as to warn against “personal communications masquerading in the clothing of newspapers.” If you are communicating on a regular basis with a small group of people, you might run afoul of this element. Genuine, bona fide publications are “published by those engaged solely in the publishing business.” If sharing your thoughts on investments is only a small part of your business, you probably don’t meet this category.General and Regular CirculationThere isn’t much clarity on this point, but the Supreme Court has said that communications aren’t of general and regular circulation if they are in response to episodic market activity or events affecting the securities industry. So if you get a push alert from the Wall Street Journal or New York Times telling you something about Elon Musk and whatever company he’s buying next, you can’t immediately follow up with your customers and give them advice based on whatever you learned about Mr. Musk. Putting out communications on a regular basis, i.e., weekly or monthly, rather than on a moment’s notice, seems to fit here.ConclusionAs you can see, it isn’t always clear whether you are keeping it between the lines. Countless people have run into trouble when they haven’t. It is still to be seen how high a priority the agencies place on folks that engage in activity like this that aren’t involved in other unsavory behavior. What is clear, however, is that you should tread lightly in this area. You should consult an attorney who understands your business and can advise you on your legal obligations and how to stay out of trouble. Most thoughts deserve two or three more, and without fully informing yourself, you run the risk of have the SEC or CFTC turn your mailbox into a baseball.