Maybe the issue is what the brokerage is actually selling.
In fact, I think the issue is what they aren't selling. They aren't selling guarantees, which is what most investors really want (not matter how adamantly they might deny it when confronted)..and they aren't selling risk insurance, which is what the masses are asking for now that they've generally and collectively lost their shirts by their own hand.
Most customers believe that the brokers are selling advice and access[.]
That's right - most customers believe that, and they're only slightly less naive than the majority of individuals - those noncustomers - who, having read descriptionless, unqualified sentence fragments so often posted on financial websites, opted to follow them.
Who are the greater fools? Those who, either directly or via commissions, paid for, read, believed, and acted upon the positive research reports of firms whose main revenue streams are derived of agency and principal securities brokerage...or those who merely read <Name> <Firm> <Ticker Symbol>: <Buy>...and did so?
Brokers are supposed to be brokering - acting as "honest" brokers or middlemen (er, middlepersons?).
Putting the word honest in quotes was an apt choice, and it's the crux of my point: I don't think it's dishonest for any person to do their job - in particular, jobs relating to selling or marketing functions - with personal opinions to the contrary. In fact, employees - again, particularly in sales, marketing, or in other client-facing capacities - are expected to carry themselves in that manner.
There are exceptions, of course, though I hardly think that people interacting with the police, lawyers or doctors could be considered "clients" or "customers." But as I see it, the line of fault, and indeed fraud, originates where verifiable, material fabrications are expressed.
That aside: I'm still waiting to hear from someone - anyone - how, yes, in what form, a business agent's personal opinion regarding a commercial product or service might be regulated (upon what grounds, with what parameters, etc)...let alone why it should be.
Anyone? |
