Wednesday, October 28, 2009

Broker Dealers win the Lobbying War - Consumers Lose

The House Bill known as the Investor Protection Act of 2009 has been watered down as feared. The Broker/Dealers and Wall Street with all their lobbying money have won the war.

Here is a portion of the bill:

"The receipt of compensation based on commission shall not, in and of itself, be considered a violation of such standard applied to a broker or dealer."

So, what they are saying is that as long as you charge 5.75% commission to your client and you tell them, then as an adviser, you have nothing to worry about. You will have complied with the law. The fact that you are selling them some piece of crap investment does not matter.

Sorry consumers. You lose again to Wall Street.