February 29, 2004
As an inactive Series 6 and 63 variable licensed agent, I would like to applaude the truth in service stance that this will create.
I am concerned though that many investers lack the knowledge or ability to comprehend how to research investment products and must rely on a professional to perform that task.
I am all for abuses in churning clients and un-necessary trades to generate commissions on the part of the broker or agent being exposed, to a point. I think that if it is standard practice to disclose information regarding your interest in the transaction then there can be a better trust on the clients part and use of integrity on the broker/agents part.
The negative publicity could cause the demise of the small financial advisor opening up a greater hole for special interests and banks to profit from the ruling. I am also disheartened at brokers responding negatively and undermining the very people they rely on to make those trades/purchases by appealing directly to the investor.
How must the employees of these brokerages feel about that? Are brokerages willing to do away with the commission based sales and sales products and pay broker/agents directly as employees? It was my feeling and I am certain it is still true that many of the brokerages bring on as many agents as they can and dont really care if the agents make it. Agents whose sales are below the to keep your job margin will be replaced and every time this happens the sales that were generated fall to a senior agent who gets fat for just being there or they go back to the house.