David Hoffman, writing for Investment News, wrote an article on the battle brewing between ETF firms, and the Investment Company institute versus FINRA over leveraged ETF’s. David quotes experts from both sides of the issue in an effort to get to the bottom of who is right and who is wrong.

“Exotic ETFs, such as inverse, leveraged and inverse-leveraged ETFs, are extremely complicated and confusing products, and the marketing and sale of these products to unsophisticated retail investors is very much on Finra’s radar screen,” Finra spokesman Herb Perone wrote in an e-mail. “That’s why we issued this guidance to firms and brokers, reminding them of their obligations.” writes David.

“There is no doubt that leveraged and inverse ETFs can be dangerous, said Harold Evensky, president of Evensky & Katz Wealth Management, a Coral Gables, Fla., firm with $500 million under advisement. Despite his reservations, however, he said that he is reluctantly siding with the ICI. “It makes me nervous when a regulator starts telling us how to use specific products,” Mr. Evensky said. “It doesn’t strike me as a reasonable role for [Finra] to step into.” David writes.

Anyone interested in this debate should check out David’s full story: HERE

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