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Brokers vs. Financial Planners
Old 04-02-2009, 10:36 AM   #1
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Brokers vs. Financial Planners

Here is an intersting article about regulating of these two groups. It sounds as if the broker is held to a much less demanding standard.

Who Will Guard Your Nest Egg? - WSJ.com
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Old 04-02-2009, 10:56 AM   #2
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The borker is held to no standards at all. They might as well be working from Nigeria, but then the corruption level in Nigeria would actually go up.
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Old 04-02-2009, 11:07 AM   #3
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LOL! Yeah, the word is fiduciary. Brokers have no obligation to the client. FPs do. Doesn't mean there aren't criminals in both areas, just that the slime trail is a bit easier to see on the broker-side.
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Old 04-02-2009, 11:28 AM   #4
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The article mentions that an FP has to disclose if there is a cheaper alternative available for a similar product.

Is this true? How could anyone ever sell anything with this requirement?

Ha
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Old 04-02-2009, 11:36 AM   #5
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The article mentions that an FP has to disclose if there is a cheaper alternative available for a similar product.

Is this true? How could anyone ever sell anything with this requirement?
Part of the problem is the definition of "similar product". What is "similar"? Is its definition similar to the definition used in the Wash Sale Rule? Or something else?

Plus, you'd have to argue that the FP KNEW of the existence of the cheaper alternative product. As long as the FP can maintain plausible deniability, this "requirement" would seem hard to enforce.
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Old 04-02-2009, 03:00 PM   #6
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The borker is held to no standards at all.
Looks like a new entry for the urban dictionary!

Should "borker" describe a person, a business, a behavior, or a felony?
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Old 04-02-2009, 03:05 PM   #7
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Either one, no matter what regulations may apply to them, still requires you to monitor them, right?
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Old 04-02-2009, 03:09 PM   #8
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Looks like a new entry for the urban dictionary!

Should "borker" describe a person, a business, a behavior, or a felony?
Borker (n.): 1. A Swedish chef. 2. A U.S. senator opposed to a judicial nominee.
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Old 04-02-2009, 03:10 PM   #9
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The article comments are interesting also.

Finra has dirty hands?

Free
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Old 04-03-2009, 12:07 PM   #10
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Good article and wonderful graphic of the "fox in the henhouse".
However, the artist should have show the "farmer in the lower 40" in the background.
I avoid brokers and FA as a rule. Call me a snob, but if I go for advice, it's a fee-based CFP with a pre-agreed-upon written contract for deliverables and cost, or not at all.
I had dealings with 2 FAs in my greenhorn days and neither delivered as promised.
Picture the vaudeville hook...
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Old 04-03-2009, 12:11 PM   #11
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Borker (n.): 1. A Swedish chef. 2. A U.S. senator opposed to a judicial nominee.
It must be Gullible Day for me. I actually went to a dictionary site to read more. You got me fair and square, Ziggy!
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Old 04-03-2009, 12:20 PM   #12
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Originally Posted by haha View Post
Here is an intersting article about regulating of these two groups. It sounds as if the broker is held to a much less demanding standard.

Who Will Guard Your Nest Egg? - WSJ.com
Interesting they made NO mention of the folks who have wrecked more financial lives than anyone other, the dreaded "Insurance agent with a Series 6"...posing as a Financial Advisor...........
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Old 04-03-2009, 01:43 PM   #13
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Was thinking that too, FD. Insurance salesmen--I wonder if there is a special corner of hell reserved for the worst of them? I hope so!
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Old 04-03-2009, 06:47 PM   #14
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.....
Chased a rainbow down a one-way street, dead end
and all my friends turned out to be, insurance salesmen
but................
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Old 04-04-2009, 04:31 PM   #15
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Yes. Jason Zweig's story.. and our New SEC gal trying to clean things up..
But, I remember back in the 70's, selling Insurance... All we had to do to get a series 6 or 7 license was spend a Few Hundred Bucks and to Be a Financial Planner it was I think $250 and A Open Book Test...LOL

It really was a Joke..But Most come from Insurance Backgrounds, so what does that tell you? I couldn't Morallly do that Job and got out of it..
The only way to make any money at it was Selling the top paying Commission Product, regardless if it was the best for the Client or not...and it still is that way..

And The Big Brokerage Houses Required their Brokers to sell certain Stocks over others, regardless if they are the best for the Client..

From the Charlie Sheen & M. Douglas movie ' Greed is Good'....LOL

I wonder if She will do much.... She has to watch herself and be very carefull not to step on too many toes, Set things up for herself, After Gov't job and get into the Private Sector and make real $ then..
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Old 04-05-2009, 04:27 PM   #16
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I wonder if She will do much.... She has to watch herself and be very carefull not to step on too many toes, Set things up for herself, After Gov't job and get into the Private Sector and make real $ then..
If you're talking about Mary Shapiro, she already made her money. She got a multi-million dollar payout when she left FINRA.
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Brokers, advisors, etc.
Old 04-05-2009, 05:06 PM   #17
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Brokers, advisors, etc.

I have learned the hard way that you have to take the initiative and research things before you jump in to investments. Know exactly what you are investing in. I think Freebird could be right about a fee-based financial planner with a fiduciary responsibility to the client being more trustworthy. I don't know that I could consult with anybody after all the money I lost a few years back through bad advice from predatory individuals posing as financial advisors with my best interests at heart. I have one(and only one) financial sounding board: my ninety year old Aunt. She built her own retirement and quit working at age 58 and boy, is she smart. Reads all day long...WSJ, Morningstar, The Economist, online sources. You have to have an interest and put in the time. No substitute for this.
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Old 04-05-2009, 05:25 PM   #18
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I have learned the hard way that you have to take the initiative and research things before you jump in to investments. Know exactly what you are investing in. I think Freebird could be right about a fee-based financial planner with a fiduciary responsibility to the client being more trustworthy. I don't know that I could consult with anybody after all the money I lost a few years back through bad advice from predatory individuals posing as financial advisors with my best interests at heart. I have one(and only one) financial sounding board: my ninety year old Aunt. She built her own retirement and quit working at age 58 and boy, is she smart. Reads all day long...WSJ, Morningstar, The Economist, online sources. You have to have an interest and put in the time. No substitute for this.
No that is totally not required - do not read books, study or otherwise waste your time - I did that for forty years.

Meanwhile the 60/40 balanced index plan thru my 401k ended up carrying the bulk of my retirement. All the rest added up to a pitcher of warm spit.

I did have a number of 'legend in my own mind periods'.

heh heh heh - Had I just bought the whole thing ala 'God Looks After Drunkards, Fools and The United States of America.' - I'd be posting from my villa in the Bahamas instead of greater Kansas City.

And now and now after 15 years of ER they have these one stop lifecycle funds. Better late than never. Yeah the weather's bad and I feel grumpy!
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