Wednesday, October 28, 2009

Why Broker/Dealers Can Never Be Fiduciaries

I suppose with this new law being worked on by the House Financial Services Committee that this will open the flood gates for financial advisers who want to do want is in the best interest of the client. In my prior post, I show the one quote that will kill it for consumers.

Let us assume that I want to go to work for a major broker/dealer. I would name one but who knows what they are calling themselves these days. I cannot keep up with all the name changes and mergers. Back to my premise of wanting to go to work for one of these firms. (Why, I do not know.) I read the Investor Protection Act of 2009 and notice that I can finally do what is in the best interest of the client. So, when that mean old branch manager tells me that I have to produce $300,000 in gross revenue in order to keep my job, all that I have to do is remind him that that is not in the best interest of my clients. The branch manager will not be able to touch me. I can keep my job even if I only produce $30,000 in revenue. After all, a production quota is in the best interest of the firm, not the client. Therefore, Mr. Branch Manger, you can take that production requirement and stick it.

Now, do you really believe that broker/dealers are going to dispense with revenue production requirements? Neither do I.

You cannot have revenue production requirements and do what is in the best interest of the client. Period.

This is why the Investor Protection Act of 2009 is a bunch of bunk and all a show. I can see loophole after loophole in it. The stupid bill conflicts itself, saying one thing and contradicting it later. Obviously, they have not read this bill either.

The broker/dealers have won, yet again. Proof positive that Congress does whatever Wall Street wants them to do. After all, that is where the money is.

I say vote them all out. Let's get someone in Washington who can read!