Top 10 Ways to Know if Your Stockbroker Is

Feb 24, 2009 3:34 am

I am trying to do this Letterman like list of the 'Top Ten Reasons Why…" thing, but its about sleazy practices that some financial advisers / agents / brokers use to basically screw their customers…

  Care to contribute??   So far I've come up with a couple...but need more...   10 - Your new broker made you liquidate your portfolio before transfering it...   9- Buy a VAR for your IRA...   8- Join the CFA Institute and imply he had his CFA Charter...   7- Sell you B shares...   I know they need some work....plz help
Feb 24, 2009 5:14 am

Instead of concentrating on the negative, why don’t you help out the profession by creating a list of: beyond Top 10 ways my broker goes above and by …

    For example:   10)     by helping purchase a new car and recommending not to buy the CL and AH insurance.   9)      hand deliverying your check request - even though you can't get out of the house because there is 4 feet of snow on the ground.   you get my point.....  
Feb 24, 2009 5:16 am

[quote=maddog]Instead of concentrating on the negative, why don’t you help out the profession by creating a list of: Top 10 ways my broker goes above and beyond by …

    For example:   10)     by helping purchase a new car and recommending not to buy the CL and AH insurance.   9)      hand deliverying your check request - even though you can't get out of the house because there is 4 feet of snow on the ground.   you get my point.....  [/quote]   corrections make - sorry - to much vodka after today's market and JH conference call.
Feb 24, 2009 2:00 pm
Convincing you that no, going all-in on Freddie or Fannie at $0.67 is not a good idea (you can replace whatever you want for the security…Sirius Satellite, Citi, your employer stock, etc.).
Feb 24, 2009 4:01 pm
B24:

8) Convincing you that no, going all-in on Freddie or Fannie at $0.67 is not a good idea (you can replace whatever you want for the security…Sirius Satellite, Citi, your employer stock, etc.).

  My favorite brilliant idea for stock lately was a guy that came in and wanted to buy a bunch of AIG and GM, convinced that things were not as bad as people were saying. Ah, the optomists...
Feb 24, 2009 7:27 pm
    placing you in a wrap account and charging you fee for losing your money.
Feb 25, 2009 3:12 pm

6)  Putting you in an annuity with a 14 year CDSC.

   
Feb 25, 2009 3:29 pm

1) Bashing other stock brokers to prospects. 

Feb 25, 2009 5:43 pm

[quote=MinimumVariance]I am trying to do this Letterman like list of the 'Top Ten Reasons Why…" thing, but its about sleazy practices that some financial advisers / agents / brokers use to basically screw their customers…

  Care to contribute??   So far I've come up with a couple...but need more...   10 - Your new broker made you liquidate your portfolio before transfering it...   9- Buy a VAR for your IRA...   8- Join the CFA Institute and imply he had his CFA Charter...   7- Sell you B shares...   I know they need some work....plz help [/quote]   We regularly cite the statistics about how clients destroy their returns by buying high and selling low, but don't brokers encourage that behavior by telling new clients to liquidate before transferring?   Unfortunately, I'd imagine it happens more often than not.
Feb 25, 2009 9:52 pm

[quote=MinimumVariance]I am trying to do this Letterman like list of the 'Top Ten Reasons Why…" thing, but its about sleazy practices that some financial advisers / agents / brokers use to basically screw their customers…

  Care to contribute??   So far I've come up with a couple...but need more...   10 - Your new broker made you liquidate your portfolio before transfering it...   9- Buy a VAR for your IRA...   8- Join the CFA Institute and imply he had his CFA Charter...   7- Sell you B shares...   I know they need some work....plz help [/quote]   #1) You know that your broker is sleazy if he assumes that another broker is sleazy simply because he has had a client liquidate a portfolio, buy a VA for an IRA, and/or used B shares.   I'm proud to admit that I have done all three of those things.  I'm also proud to admit that when I've done it, it has been in my client's best interest.    
Feb 25, 2009 10:34 pm

Just trying to help educate them on MPT, statistically you're going to die before them and I thought they should be up to speed on your portfolio and how we do things and well......one thing led to another.  Beautiful family you have though!

Feb 26, 2009 4:37 pm

[quote=iceco1d]You know your stock broker is sleazy when…

  You come home from work and you catch him in bed with your wife...or your daughter...or both![/quote]   An excellent LOL.
Feb 27, 2009 2:09 am

You know you have a sleazy broker when you watch “Boiler Room”, you listen to the brokers in the background giving their sales pitches and you think, “Wait a minute…I’ve heard all of this somewhere before…”

Feb 27, 2009 3:23 am

[quote=MinimumVariance]I am trying to do this Letterman like list of the 'Top Ten Reasons Why…" thing, but its about sleazy practices that some financial advisers / agents / brokers use to basically screw their customers…

  Care to contribute??   So far I've come up with a couple...but need more...   10 - Your new broker made you liquidate your portfolio before transfering it...   9- Buy a VAR for your IRA...   8- Join the CFA Institute and imply he had his CFA Charter...   7- Sell you B shares...   I know they need some work....plz help [/quote]

Now we're bashing ourselves?  Smart.  Talk about self-loathing. 
Feb 27, 2009 5:39 pm

I guess none of you’ve ever seen David Letterman’s Top Ten list schtick. They are supposed to be funny. Now the one about coming home and finding your broker in bed w/ your wife, that’s just normal human behavior – everybody does that. Remeber the guy who drove a cement mixer, and came home accidentially, and found the local insurance salesman’s new convertible parked in his driveway, and…U remeber this story I’m sure. However, if he’d been in bed (make that the tool shed) with your 15 year old son… 

  I thought of another one tho:   6- Not telling your dear departed dad that the 'tax free' annuity he sold him may escape the estate tax and deferrs dad's capital gains, but the inheritor has to pay income tax rates on required withdrawls. (?)   Come on guys -- be creative here....instead of sleazy how about sleazy and unethical???
Feb 27, 2009 6:02 pm

Who is David Letterman?

Feb 27, 2009 6:08 pm

[quote=MinimumVariance]I guess none of you’ve ever seen David Letterman’s Top Ten list schtick. They are supposed to be funny. Now the one about coming home and finding your broker in bed w/ your wife, that’s just normal human behavior – everybody does that. Remeber the guy who drove a cement mixer, and came home accidentially, and found the local insurance salesman’s new convertible parked in his driveway, and…U remeber this story I’m sure. However, if he’d been in bed (make that the tool shed) with your 15 year old son… 

  I thought of another one tho:   6- Not telling your dear departed dad that the 'tax free' annuity he sold him may escape the estate tax and deferrs dad's capital gains, but the inheritor has to pay income tax rates on required withdrawls. (?)   Come on guys -- be creative here....instead of sleazy how about sleazy and unethical???[/quote]   Funny, I've heard the same regarding IRAs.  Yet the way you make it seem, if someone has an IRA, there's no possible way the rep was sleazy and unethical.  Right?
Feb 27, 2009 9:41 pm

[quote=MinimumVariance]I guess none of you’ve ever seen David Letterman’s Top Ten list schtick. They are supposed to be funny. Now the one about coming home and finding your broker in bed w/ your wife, that’s just normal human behavior – everybody does that. Remeber the guy who drove a cement mixer, and came home accidentially, and found the local insurance salesman’s new convertible parked in his driveway, and…U remeber this story I’m sure. However, if he’d been in bed (make that the tool shed) with your 15 year old son… 

  I thought of another one tho:   6- Not telling your dear departed dad that the 'tax free' annuity he sold him may escape the estate tax and deferrs dad's capital gains, but the inheritor has to pay income tax rates on required withdrawls. (?)   Come on guys -- be creative here....instead of sleazy how about sleazy and unethical???[/quote]   If they are supposed to be funny, can you please explain the humor in your list?   10 - Your new broker made you liquidate your portfolio before transfering it...   9- Buy a VAR for your IRA...   8- Join the CFA Institute and imply he had his CFA Charter...   7- Sell you B shares...   Not only am I missing the humor in your list, I'm also failing to see the sleaziness and unethicalness (other than #A). 
Feb 28, 2009 11:02 pm

these are numbers, where’s number A go?

   
Feb 28, 2009 11:06 pm

Come on – there’s gotta be a list of ten things just about EIA’s?

  How about tail risk in asymmetric density functions?   Something comical in calculating V@R?   BTW: Had a great response to a CC: "My son's a lawyer. He handles our money!"
Feb 28, 2009 11:12 pm

I imagine he's referring to the CFA designation comment (number 8).

Feb 28, 2009 11:31 pm

…He explains to you, with the exact same degree of sincerity and intensity as before, that THIS bank-buyout of his firm is REALLY good for both of you.

Feb 28, 2009 11:49 pm

[quote=iceco1d]You know your stock broker is sleazy when…

  You come home from work and you catch him in bed with your wife...or your daughter...or both![/quote]   That may be a little sleazy, but what's really sleazy is when he bills you hourly for the time in bed with your wife and daughter.
Mar 2, 2009 5:17 am

When the hedge fund your broker gets you into with consistent 10+% returns gets its own CNBC Presents show, The $50 Billion Heist



When the commission for the product they sell you is more than your best YEAR of income



When they pull out the…“I get paid in two ways” convo



When they pronounce your name wrong on the cold call during dinner



When they use the designation “CSA” and refer to it as something that took rigorous study and a comprehensive (er, open book) exam



When they refer to them self as an advisor, then take commissions, which technically means they are not an advisor



When they are the co-author of a book; or appeared on the cover of a magazine you’ve never heard of



When they refer to them self as a “well known financial educator” - only no one has ever heard of them



When they specialize in “safe money retirement money”…only to put their clients money into annuities issued by insurance companies that may be defunct in the next 24 months



When they pull out the American Funds ICA chart that shows 80 years of great returns to prove that you should just “hang in there” because clearly things will turn around

Mar 2, 2009 2:55 pm
brandnewadvisor:

When the hedge fund your broker gets you into with consistent 10+% returns gets its own CNBC Presents show, The $50 Billion Heist

When the commission for the product they sell you is more than your best YEAR of income

When they pull out the…“I get paid in two ways” convo


When they refer to them self as an advisor, then take commissions, which technically means they are not an advisor

When they refer to them self as a “well known financial educator” - only no one has ever heard of them

When they specialize in “safe money retirement money”…only to put their clients money into annuities issued by insurance companies that may be defunct in the next 24 months

When they pull out the American Funds ICA chart that shows 80 years of great returns to prove that you should just “hang in there” because clearly things will turn around

    These are great... the last one is a classic.. I have had clients actually bring in that chart as part of their statements... sad... sad.... sad...
Mar 2, 2009 3:45 pm

I read some of this stuff and think that I must be the king of sleaze. I use or have used some of these things in the past and have always thought that I was doing what is in the clients’ best interest and still believe that what I did was in their best interest.

  Let's look at some of these sleazy things that I've done.   I've slept with the wives and daughters of my clients.  (I was single at the time, and I slept with the wives before they were married.  As for the daughters, I slept with the daughters before the parents became clients.   I've sold "B" shares.   I've sold annuities inside of IRAs.   I've made more commission on a sale than my client made in income in his best year.   I've used the "I get paid in two ways" line.    I've pronounced names wrong on cold calls.  I've even pronounced my clients name wrong at times.   I refer to myself as an advisor and I do take commissions.   I don't specialize in "safe money retirement", but for people who want their money safe, I've used the guarantees of annuities.  Does anyone know anyone who has ever lost money because of their annuity company going under?  I know that it has happened, but I've never met anyone.   I've never used the ICA chart, but I would if it would get someone who needed to stay invested to stay invested.   Until now, I never knew that I was so sleazy and to think that I started my practice with the idea of always doing what was in the clients' best interests no matter what.   My point with this is that we succeed in making us all look sleazy when we talk about others in our industry being sleazy.  Look, I've done tons of things that are being considered sleazy, yet everytime, it was for my clients benefit.  (Ok, screwing them (literally, not figuratively), benefitted me as much as it did them.)
Mar 3, 2009 2:26 am

Hey anon - I think I can help with your confusion.  See below in Red:

[quote=anonymous]I read some of this stuff and think that I must be the king of sleaze. I use or have used some of these things in the past and have always thought that I was doing what is in the clients’ best interest and still believe that what I did was in their best interest.

  Let's look at some of these sleazy things that I've done.   I've slept with the wives and daughters of my clients.  (I was single at the time, and I slept with the wives before they were married.  As for the daughters, I slept with the daughters before the parents became clients.   I've sold "B" shares.  Fine if small account, otherwise you are correct, you are sleazy; you are wrong, it's not in the clients best interest.
  I've sold annuities inside of IRAs.  Very rarely not sleazy; any advisor who understands the actuarial functions of most annuities would have a very hard time thinking they were in the best interest of anyone.  Though, it is NOT always bad to do this.  Easy litmus: if this is your first option or you do this for more than 50% of your clients - you are sleazy; otherwise, it may be okay...but probably not.
  I've made more commission on a sale than my client made in income in his best year.  Very sleazy, no questions, if you need an explanation than I'm sorry - there is nothing I can write that will help you.
  I've used the "I get paid in two ways" line. Again, sleazy.  Just saying it is sleazy.  Not to say it doesn't work, but I personally would not work with a professional that uses this line. 
  I've pronounced names wrong on cold calls.  I've even pronounced my clients name wrong at times.  Happens.  Cold calling in general is a little sleazy.  Again, it works for some, but will get progressively more difficult as future generations accumulate wealth and become ideal prospects.
  I refer to myself as an advisor and I do take commissions.  Illegal, without proper disclosure that you duly licensed and when making commissions are not acting as an advisor and that there may be a conflict of interest, etc, etc, etc.  If you do the disclosure route = not sleazy, just not good business sense; not using disclosure (like most brokers, agents, reps, etc) = sleazy.
  I don't specialize in "safe money retirement", but for people who want their money safe, I've used the guarantees of annuities.  Does anyone know anyone who has ever lost money because of their annuity company going under?  I know that it has happened, but I've never met anyone.  Should be happening soon.  Annuities aren't inherently bad, just a lot of ignorant douches out there who make those who use them responsibly look sleazy.
  I've never used the ICA chart, but I would if it would get someone who needed to stay invested to stay invested.  Staying invested in some markets is okay.  Most advisers...er, whatever people call themselves these days, have absolutely no clue when it's okay and when it's not.  The people who have been blind to the last year = sleazy (when using this technique).
  Until now, I never knew that I was so sleazy and to think that I started my practice with the idea of always doing what was in the clients' best interests no matter what.   My point with this is that we succeed in making us all look sleazy when we talk about others in our industry being sleazy.  Look, I've done tons of things that are being considered sleazy, yet everytime, it was for my clients benefit.  (Ok, screwing them (literally, not figuratively), benefitted me as much as it did them.)  Yeah....the deal is: most sleazy people don't think they're sleazy.  Kinda like a lot of fat people don't think they're fat and stupid people don't think they're done.  In the court of public opinion these items listed above are sleazy.  Even ol' Bernie had good intentions with his Ponzi scheme; and most people who sell sh*t to people are stone cold sold it is appropriate.  Occasionally it is a good idea to think long and hard about how we do what we do.  For everyone (myself included) there are things we're not proud of, should change, and hopefully will.
[/quote]
Mar 3, 2009 3:53 am

[quote=brandnewadvisor]
Hey anon - I think I can help with your confusion.  See below in Red:

[quote=anonymous]I read some of this stuff and think that I must be the king of sleaze. I use or have used some of these things in the past and have always thought that I was doing what is in the clients’ best interest and still believe that what I did was in their best interest.

  Let's look at some of these sleazy things that I've done.   I've slept with the wives and daughters of my clients.  (I was single at the time, and I slept with the wives before they were married.  As for the daughters, I slept with the daughters before the parents became clients.   I've sold "B" shares.  Fine if small account, otherwise you are correct, you are sleazy; you are wrong, it's not in the clients best interest.
  I've sold annuities inside of IRAs.  Very rarely not sleazy; any advisor who understands the actuarial functions of most annuities would have a very hard time thinking they were in the best interest of anyone.  Though, it is NOT always bad to do this.  Easy litmus: if this is your first option or you do this for more than 50% of your clients - you are sleazy; otherwise, it may be okay...but probably not.
  I've made more commission on a sale than my client made in income in his best year.  Very sleazy, no questions, if you need an explanation than I'm sorry - there is nothing I can write that will help you.
  I've used the "I get paid in two ways" line. Again, sleazy.  Just saying it is sleazy.  Not to say it doesn't work, but I personally would not work with a professional that uses this line. 
  I've pronounced names wrong on cold calls.  I've even pronounced my clients name wrong at times.  Happens.  Cold calling in general is a little sleazy.  Again, it works for some, but will get progressively more difficult as future generations accumulate wealth and become ideal prospects.
  I refer to myself as an advisor and I do take commissions.  Illegal, without proper disclosure that you duly licensed and when making commissions are not acting as an advisor and that there may be a conflict of interest, etc, etc, etc.  If you do the disclosure route = not sleazy, just not good business sense; not using disclosure (like most brokers, agents, reps, etc) = sleazy.
  I don't specialize in "safe money retirement", but for people who want their money safe, I've used the guarantees of annuities.  Does anyone know anyone who has ever lost money because of their annuity company going under?  I know that it has happened, but I've never met anyone.  Should be happening soon.  Annuities aren't inherently bad, just a lot of ignorant douches out there who make those who use them responsibly look sleazy.
  I've never used the ICA chart, but I would if it would get someone who needed to stay invested to stay invested.  Staying invested in some markets is okay.  Most advisers...er, whatever people call themselves these days, have absolutely no clue when it's okay and when it's not.  The people who have been blind to the last year = sleazy (when using this technique).
  Until now, I never knew that I was so sleazy and to think that I started my practice with the idea of always doing what was in the clients' best interests no matter what.   My point with this is that we succeed in making us all look sleazy when we talk about others in our industry being sleazy.  Look, I've done tons of things that are being considered sleazy, yet everytime, it was for my clients benefit.  (Ok, screwing them (literally, not figuratively), benefitted me as much as it did them.)  Yeah....the deal is: most sleazy people don't think they're sleazy.  Kinda like a lot of fat people don't think they're fat and stupid people don't think they're done.  In the court of public opinion these items listed above are sleazy.  Even ol' Bernie had good intentions with his Ponzi scheme; and most people who sell sh*t to people are stone cold sold it is appropriate.  Occasionally it is a good idea to think long and hard about how we do what we do.  For everyone (myself included) there are things we're not proud of, should change, and hopefully will.
[/quote][/quote]

Whew, at least you didn't raise any objections to him sleeping with wives and daughters. ... Here at Jones, you can sleep with the wife -- and then then the daughter -- so long as you get a Switch Letter. (But you have to carefully note their sexual objectives.)





Mar 3, 2009 11:58 am
I've made more commission on a sale than my client made in income in his best year.  Very sleazy, no questions, if you need an explanation than I'm sorry - there is nothing I can write that will help you.   I do need an explanation.  Will you give me one please?  I have absolutely no idea how the size of my commission has any relevance.