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Washington Post article: "Beware of your financial adviser"
Old 03-07-2016, 10:58 AM   #1
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Washington Post article: "Beware of your financial adviser"

https://www.washingtonpost.com/news/...ncial-adviser/

Interesting quotes:

"These authors conduct an ingenious analysis of a unique BrokerCheck dataset that covers 644,277 currently-registered financial advisors in the United States, and an additional 638,528 who have left the industry between 2005 and 2015..."

"More than 7 percent of registered advisors have been disciplined for misconduct or fraud..."

"Perhaps the most surprising finding is the high proportion of repeat offenders still present in the industry. Among advisors with documented misconduct, 38 percent were repeat offenders..."

"Advisors who commit misconduct do suffer career penalties. Forty eight percent leave their current jobs within a year. Yet almost half of those who leave (44 percent) find employment in the industry within the year..."

"That misconduct is targeted at unsophisticated, less educated, and elderly consumers, is troubling, because these are the segments of the population that the existing regulation is already trying to help..."
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Old 03-07-2016, 05:16 PM   #2
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what scares me more than the 7% disciplined for misconduct, is the general misconception that the industry fosters in the minds of potential clients.
I have a fairly close family member who is an FA...originally hired and trained by Edward Jones. What I learned is that almost ALL of the training is on sales techniques, not on understanding markets, allocations, or investment strategies. It's all about learning how to sell yourself as an expert.
Every time I see an Edward Jones commercial I experience a little bit of GERD.
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Old 03-07-2016, 05:28 PM   #3
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If investors would read the ADV for their potential advisor firms, they would know about any past disciplinary actions.
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Old 03-07-2016, 07:12 PM   #4
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Only 7% fraud/misconduct? From the posts on this site, I thought it'd be closer to 97%.
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Old 03-07-2016, 07:21 PM   #5
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Originally Posted by gcgang View Post
Only 7% fraud/misconduct? From the posts on this site, I thought it'd be closer to 97%.
The standard is pretty low. Most morons can make up some nonsense on why a 85 yo man with a bad heart needs a variable annuity.
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Old 03-07-2016, 07:29 PM   #6
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And the profession is self-policing isn't it? 7% disciplined... what percentage have complaints against them? What percentage just get away with it? Also bearing in mind that charging 1-3% for something that could be had for 0.1% should be illegal!
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Old 03-07-2016, 09:19 PM   #7
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I spend a good bit of time on Broker Check. It is hair raising what you can read about on there. Best thing you can do for friends who are extolling the virtues of some new sharpie they met is to send them the website link.

Bad, bad apples.
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Old 03-07-2016, 10:32 PM   #8
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The study (pretty sure the same one) is also discussed in this recent thread here: Study Examines Extent of Financial Advisor Misconduct
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Old 03-08-2016, 03:06 PM   #9
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Quote:
Originally Posted by gcgang View Post
Only 7% fraud/misconduct? From the posts on this site, I thought it'd be closer to 97%.
That 7% is only the ones dumb enough or unlucky enough to get caught.
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