Notes

A promissory note is a legal document drawn up by an investment adviser. The purpose of such a note is to enable the investor to meet his obligations to a lending institution in the future. In layman's terms, it is an IOU. This type of financial instrument, however, is not regulated under securities laws similar to other conventional investments. This is why it's very important for you to consult a FINRA lawyer who deals with these types of issues as they pertain to an investment adviser's responsibilities.
A private loan can be a risky business for the investor. You are placing your entire life savings on the line when you make such a commitment. It's very easy to let a slip away from responsibility and the consequences can be devastating to your overall finances. The risks are heightened by the fact that a private investment adviser typically does not have as much means to protect his own interests as the lender does, unless he has specialized knowledge of securities law.

This is the main reason why you should always work with a lawyer when you are dealing with any sort of legal matter. There are a variety of different areas of the adviser's duties that he must perform properly. Some of those areas include advising clients about IRA plans, investment types, tax implications, estate planning, among others. If anything untoward ever happens while you are an investor under such a professional's care, your legal professional is obligated to help you find a solution to your problems. In other words, he must stand by you until you have a successful outcome.

As far as the matter of a promissory note is concerned, it is one of the most common areas of expertise for an investment adviser. As an adviser, your duty is to settle a financial transaction (usually a personal loan) by writing a promissory note. That note will serve as the centerpiece of all communications between your advisor and the borrower. As an investor, your legal advisor must protect you in the event that the loan proceeds do not materialize out of pocket.

As mentioned earlier, this is the reason why you should always work with a lawyer when you are dealing with legal matters. A lawyer who specializes in financial law will be more familiar than any other investment adviser with the intricacies of the law. This is also the reason why you should never deal with an investment adviser who does not have any legal experience whatsoever. Any advisor who does not have a strong background in the realm of securities law or who fails to consult a lawyer before making a certain move is likely to make you and your portfolio much higher risk. Make sure that your advisor always has the full understanding of securities law before he makes any recommendations to you.

As a reminder, the promissory note that you need to have is for equity. This means that if there is any kind of debt involved, your investment adviser should not be writing such notes. The only exception to this rule is if you are borrowing money from your mother as part of a parenting plan. If FINRA arbitration has equity in your house, she can write the note for you. If you want to discuss other options, feel free to contact a lawyer before you proceed.
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