March 29, 2004
I find it interesting that in the health care system there is an absolute prohibition against self referral or referral to an entity in which the referring physician has a financial interest. This was established to insure appropriate ethical behaviour and to prevent the unnecessarty compromise of the client.
It seems very appropriate that we recognize the same ethical issues are operational in our financial lives. It is very appropriate that we establish the same kinds of prohibitions and disclosures to insure our financial well being.
Disclosure of financial conflicts by brokers is indeed a necessary first step. However, we must be mindful that while necessary it may not be sufficient.