Sitting ducks: Obama's overhaul goes for brokers
In a shockingly radical move, President Barack Obama's regulatory overhaul would force Wall Street brokers "to place their client's interests ahead of their own."
The Wall Street Journal says this with a straight face, noting that such a change would "upend" the Street because brokers are now only required to offer "suitable" investments.
Even a veteran investment banker says the plan's interest in regulating brokers' behavior is long overdue. Former Citigroup wealth-management chief Sallie Krawcheck is quoted as calling this a "smart and overdue move" for the big brokerages owned by investment banks.
Stating the obvious that isn't so obvious, the story notes:
But requiring brokers to operate under a fiduciary standard could force them to offer products that are less costly and more tax-efficient. They will have to disclose any potential conflicts of interest, such as any fees they may get for favoring one product over another. That could mean clients will be offered fewer proprietary products if the broker can find a lower-cost option elsewhere.
Which means that Citigroup's investment adviser wouldn't have stuck me with a Citi subsidiary's own annuity plan if there was a better one out there for me. Which there was. Which means I was an ignorant investor, which embarrasses me. Which means I'm like most investors, which should embarrass you.
For dimwitted investors, this valuable story notes:
1 comment(s)
What are you talking about? We are not in a stock market driven economic meltdown. The economy was driven into the ground like a nose diving 747 by none other than Average Joe's largest asset having to be sold, forced by shoddy Real Estate Industry mortgage practices. An asset sold to Average Joe by a golden jacketed, cell phone sporting neanderthal, driving your stock broker's used Porsche. That's right, an under educated bullshit artist, more commonly known by its Latin name as "the real estate agent". Talk about biased selling practices. These geniuses get their economic research underneath their unimaginative collective imagination, with a government lobby keeping commissions at 5% as they help push 3 wheeled junkers up hill. Let me guess, Obama and his cronies are hitched to real estate like the Clintons were and are pointing fingers in the opposite direction hoping that Average Joe's family don't notice they are sleeping in an about to be repossessed car. Having former Citigroup wealth-management chief Sallie Krawcheck tout the Obama "drive the stake deeper into Wall Street's chest Campaign" is insane. Who the hell would listen to her anyway, isn't she selling Florida condos at the moment? Anybody who thinks that Wall Street is behind all of our woes better give their head a shake and change the channel. Wall Street didn't sell Average Joe his or her mortgage. Nope, Wall Street bought bundles of them from the Real Estate Industry, packaged them in a nice box and sunk a few hedge funds. Hey man, I'm not saying that Wall Street is home to saints, virgins and the widows and orphans of the world. Wall Street buried a few widows with this one. They are as full of shit as the Real Estate Industry. I'm saying don't buy this bullshit again. Didn't you get it for a loved one last Christmas, just before your agent gave their used Porsche to their kid, then dropped you at the bus stop in their new Ferrari?
Johnny Transistor,
Posted On: Friday, Jun. 19 2009 @ 8:13PMJune 19, 2009