September 17, 2004
September 17, 2004
I support the withdrawal of the Merrill Lynch rule for several reasons:
1. That Registered Representatives RR and their employers are biased toward generating revenues for the RR and the firm. I worked at a large full-service brokerage firm ironically Merrill Lynch for three years until the threat to my integrity opened my eyes to the fact that I could assist consumers independently, without bias, as a fee-only Registered Investment Advisor. The large brokerage firms simply cultivate an environment where greed is good winning a free trip to a local 5-star resort by generating sufficient revenue is worth more to the advisor than providing suitable investment recommendations to the client and when questioned in an arbitration panel, the advisor is categorized as a salesperson by his or her legal counsel, not an Investment Advisor required to uphold a fiduciary standard of care.
2. The marketing these days by the large brokerage firms is fairly sickening. As I watch television ads showing a lady rooting for and coaching a little girl playing baseball, I wonder how many RRs from this firm have actually engaged in that very act. Sitting on a beach, a thoughtful man provides careful investment guidance to the lady next to him, presumably his wife, on how to get that beach house sooner only to find out its her advisor who has accompanied both her and her husband to the beach. How often has that actually happened? The ads are full of deceit. What are the families, the customers of these firms, supposed to think after watching such advertisements? That they have a trusted investment advisor whos only goal is to look out for the customers family? Completely unbiased and only focused on the interests of the customer? I think not. You know as well.
If a person is claiming to be a financial advisor, financial planner, or financial consultant, they need to be held to the same fiduciary standards that I am. There are other professions requiring board certification and fiduciary oaths Doctors for example. Imagine a television ad where a gentleman is seen operating on a patient with the patients concerned family watching only to find out the doctor has never taken a Hippocratic Oath. Why not? Because hes not really a doctor. Hes just someone whos decided to experiment with surgery. If he screws up, who cares, he has no duty to the patient anyway. He has no continuing education requirements. But hey, his ads are generating a lot of business. Isnt that what counts?
To your health,
James Schwartz, CFP
Desert Valley Financial Planning, LLC
20 W Juniper Ave, Ste 101
Gilbert, AZ 85233