August 24, 2004
Any company that advertises advisory services must act in the best interest of the people they are advising.
First, I believe that advice of any kind should have a level of personal responsibility for the person providing the advice. I dont belive there can be generic advise from a large company. There must be individuals providing one on one advice, and in this case there must be individual responsibility at the advisor level for the advice provided. I believe individuals truly providing advice must be regulated by the SEC to ensure individual ethical and moral responsibility.
Second, if brokerage firms believe their advisory services are incidental to selling products, then it should be labeled as such. I think cigarettes are an interesting example. Cigarettes are marketed as a way to be cool, but the reality is they cause cancer and may kill you.
Brokarage firms are marketing advisory services as a way to provide investment advice, but in reality they are using advisory services as a way to sell product.
In this case, Id like to see a disclaimer similar to those on cigarette ads in a big box at the bottom of the page. Or, at the start of a call into the advisory service saying This call may be recorded for quality purposes, and please note that any advice you may receive is directed to get you to by our investment products and may not be the best advice available on the market.
steve