You would think so, judging from a story in today's New York Times, the house organ of the left wing of the Democratic party. This story tells the same old saga: Wirehouses are all sales and no financial planning. Funny thing, I know a slew of wirehouse advisors who are in fact ethical. But, the independents, hybrids and fee-only RIAs sure do love to grind an axe on this subject.
Here is one paragraph from the story that I think is completely untrue (although, again, it makes for good copy):
The New York Times wrote: "The firms may also make money through other arrangements, including what is known as revenue sharing, where mutual fund managers may, for instance, agree to share a portion of their revenue with the brokerage firm. By doing this, the funds may land on the brokerage firm’s list of 'preferred' funds. Some brokerage firms, including Merrill Lynch and Morgan Stanley Smith Barney disclose their revenue sharing information on their Web sites, or at the point of sale. Edward Jones discloses it as well, as the result of a settlement of a class-action lawsuit. UBS and Wells Fargo Advisors declined to comment on whether it discloses this information."
I worked, briefly, for an asset manager in a wholesaling capacity 10 years ago. I went before (then) Prudential Securities to get my GARP-ish separate-accounts manager on the preferred list. They told me upfront that we'd have to share a few basis points of revenue, but we still nevertheless went through a gauntlet of due diligence. It was NOT a pay for play. Pru was completely ethical and objective in analyzing us.