If you are an avid reader of financial information, especially when it comes to investments and stocks you have probably seen the expression “not financial advice”. But what does it actually mean? Are there any implications of giving financial advice?

In this article, we will analyze the meaning of not financial advice and why many publications, and authors use it. We will also see if there are any implications of giving unqualified advice related to finance, and what the requirements are to legally give financial advice.

What does not financial advice mean?

The expression “this is not financial advice” means that whatever opinion is expressed by the author should not be considered as a recommendation. Not everyone is legally allowed to advise on matters related to finance, and disclosing that your opinion is not advice protects you from being sued, and potentially being imprisoned or fined.

Is it illegal to give financial advice?

In the US it is illegal to give financial advice unless you are a registered, and licensed financial advisor. If you are not a licensed financial advisor, giving financial advice could be considered a misdemeanor. This means that you might be sued, which could lead to paying a fine or even being imprisoned.

If you are not a licensed financial advisor, you cannot legally give financial advice. This violates the regulations of the Investment Advisor Association (IAA). It can lead to a fine of up to $10,000, and you might be imprisoned in federal prison for up to five years.

Does saying not financial advice do anything?

By saying “this is not financial advice” you are avoiding being prosecuted for illegally giving unqualified financial advice. This could protect you from being sued, or even facing some of the worst consequences like prison time.

It essentially means, that your opinion on a particular topic should not be constructed as financial advice and therefore you cannot be responsible if someone decides to act upon that as financial advice.

What qualifies financial advice?

Financial advice means advising individuals or entities on what financial decisions to make. In order to legally give advice, you need to be registered as a financial advisor with the IAA. 

Is it illegal to give financial advice?

Although you can talk about investments and discuss financial advice unless you are a registered financial advisor you cannot engage in this activity as a business. Therefore, it is illegal to charge for financial advice unless you are a registered financial advisor.

Can you be sued for giving financial advice?

Yes, unless you disclose that your opinions are not advice you can be sued for it. This is why using “not financial advice” can protect you in case you are sued. This way you can justify that you were not implicitly trying to give financial advice.

Can you give general financial advice without a license?

No, you can be sued for giving financial advice if you are not a licensed financial advisor. By using the “not financial advice” disclaimer you are ensuring that in case you are sued, you can justify that your opinion was never intended to be constructed as advice.

If you are acting as a financial advisor without following the required legal procedures you can face a fine or even imprisonment.


We have seen how important it is to use the disclaimer “not financial advice”. Make sure you use it when sharing your opinions on any topic related to finance. This ensures that in case you are sued, you will not be liable for the opinions you shared.

It is important to be aware of the possible consequences of giving advice related to finances or investments without being a licensed financial advisor. Make sure you always use the not financial advice disclaimer in order to prevent any legal action against you.

Always disclose that your opinion on any financial topic should not be used as financial advice.

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