The latest conflict du jour on Wall Street, Insider Trading makes me wonder when the public
will finally boycott them. The SEC along with assistance from the FBI are preparing insider
trading charges that could entangle investment bankers, mutual fund traders, hedge funds and
In the last decade Wall Street greed and incompetence credited trillions of dollars in losses for
investors yet investors continue to place their money and trust with the very firms which
continue to trade at times with a conflicted interest against them. Investors must have short-term
memories or they wouldn’t continue to conduct business with these firms.
Wall Street uses advertising and marketing tactics to tell investors what they want to hear, we are
competent and trustworthy. They continue to try convincing people they have an expertise they
simply don’t have.
Most investors are confused about the term investment advice and the different types of
professionals who can provide it. Fee only investment advisers are legally obligated to act in the
best interests of their clients. In contrast, brokers who call themselves, financial advisers
facilitate securities purchases and sales to their clients, usually for a commission on Wall Street’s
behalf. They are primarily governed by FINRA, which requires that their recommendations be
suitable for a client. In broker/client relationship, filled with all sorts of conflicts of interests,
suitability is an extremely blurry standard at best.
There is a solution, work directly with a firm like Vanguard or hire and independent registered
investment advisor who is paid a disclosed fee to help you achieve your goals. They don’t have
the conflicts of interest that afflict Wall Street companies.
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