August 29, 2010
Yes, the titles are very confusing between brokers, dealers and investment or financial advisers. I feel strongly that the standards should be the same for a broker as an investment adviser. Brokers and dealers should have a fiduciary duty to act in the best interest of their clients because I think they try to give that impression to their clients anyway. People generally trust their broker and mistakenly think they are acting in their best interest, since that is the way they market themselves initially(to get your business). Some, not all of course, are not much better than unscrupulous mortgage lenders who took advantage of people trying to buy homes, those guys represented themselves as "only wanting to help people get a home". I'm sure a great many people did not understand how much commission the lender was being paid for making a loan, hence the mortgage meltdown. Just like a lot of people don't know how/why brokers are paid different amounts for different services/products. Just another industry successfully operating in the grey.