Financial Disclosures - 5 Tips on What Not to Do

Financial Disclosures

Hedge Fund Disclosure Tips

Financial Disclosures  There are many "how to" articles for hedge fund managers, so here is a list of 5 short tips on what not to do while writing disclosures for hedge fund performance or marketing materials.

  1. Objectivity is a must - writing in a strong positive slant can actually hurt your fund's image and reputation during a due diligence process
  2. Always work with a compliance consultant, CCO or 3rd party auditing firm on any performance or marketing related materials. If you are not a licensed or recognized legal expert it pays in the long run not to act as one. Even if your hedge fund is a on a tight budget it would pay dividends to invest in wise legal advice for disclosure related tasks and other work.
  3. Never leave more questions than existed before the disclosure was read - when needed refer to a full disclosure resource which is also "compliance approved."
  4. Do not print disclosures in size 5 font. Publish disclosure language in a close or same size font as the rest of the marketing materials - not only does this prevent looking like you are hiding something but many times disclosures help educate investors in positive ways
  5. Do not write lengthy redundant explanations while a short to point factual disclosure will do. Concise, collectively exhaustive and mutual exclusive are good rules to live by while writing disclosures. Every word and inch of space on your marketing materials is worth thousands of dollars, don't waste it with redundant sentences or by leaving out key facts and figures.
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Tags: Financial Disclosures, Hedge Funds Disclosure, Hedge Fund Disclosures, Investment Disclosures, Security Disclosures, Performance and Marketing Disclosures, SEC, FINRA

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