Posts filed under “Finance”
My Sunday Washington Post Business Section column is out. This morning, we look at the various legal standards of care financial advisors must adhere to.
The print version had the full headline Why Two Standards for Financial Advice? while the online version was Find a financial adviser who will put your interests first.
As I have discussed in the past, there is no reason not to put a client’s interest first — unless your goals are to maximize profits to the brokerage firm.
Here’s an excerpt from the column:
“You can buy a Yugo or a Mercedes-Benz. They may both be automobiles, but they vary dramatically.
Regardless, everywhere these cars are sold, they each must meet the same government rules. Safety regulations, crash worthiness standards, fuel economy, consumer warranties, etc., apply equally to both vehicles.
This is decidedly not true of the people who provide you with financial advice. There are two completely different standards for these people — they are governed by two wholly different sets of regulations. The two standards are ‘suitability‘ and ‘fiduciary‘.”
The emails are already pouring in from retail brokers, giving me examples of instances where brokers under the suitability standard did the right thing, put clients first, etc.
And that is my exact point: People who work in this business should not proudly point to instances where the clients were not screwed; rather, not screwing your clients should be the standard operating procedure for those who manage money or provide financial advice.
Hence, why I believe the Fiduciary standard should be the law of the land.
Find a financial adviser who will put your interests first
Washington Post, October 26 2014
I have been getting the Bloomberg Brief for a long time — its a very good daily subscription showing an overview of a variety of market and economic factors. Readers of the Big Picture can get a 2 month free trail subscription on the graphic below and filling out the usual forms. (No, I don’t…Read More
1. You’ve got to get along. If you don’t have good people skills, you’ll never succeed, even if you run your own business. 2. Money talks. He who has cash has leverage, and someone always has more than you do. There’s rarely a deal between equals. 3. Leverage is not always about money. I.e. if…Read More
From the Wall Street Journal: The Libor manipulation scandal has ensnared at least 17 financial institutions and 28 individuals in a wide-ranging investigation spanning 11 countries and four continents. So far, it has netted at least $5 billion in penalties, with more on the way. Below, we’ve taken the most complete list of allegedly involved…Read More
Yesterday, Business Insider posted a huge piece, wherein they ask various folks for their best idea for a decade. With the low key headlne, Wall Street’s Brightest Minds Reveal Their Best Investment Ideas For The Next Decade, here is how I responded: Financial planning: “As it turns out, that is an easy question: Our own…Read More