advisor fraud, professionals, or salespeople masquerading?

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Postby admin » Tue Jun 21, 2005 12:49 pm

Perfect logic by financially abused client
Sandra Gibson
Financial Post
Monday, June 13, 2005
Your comments are grossly unfair -- my broker conducted 18 trades in February, 2003, which resulted in significant losses for me.
I had written to the broker in January, 2003, regarding a minor infraction and in that letter I stated that "no further transactions were to be conducted without my prior knowledge." That letter went to my broker's compliance department.
I was in Mexico when the 18 trades were conducted in February and did not learn of them until my return.
What more could I have done to protect myself? If, in fact, the industry operates on a "buyer beware" basis, then IDA, OSC, etc., should declare same. (Advocate comment, "I agree 100%, anything less is misleading the public")
Many investors are intimidated (no matter what their level of intelligence or education) by brokers who imply that their knowledge is so specialized that the client could not possibly apprehend enough info to make an independent decision. (advocate comment, "yet when called into court, many bank owned dealers claim "no duty of care" to the client on a technicality, saying, in effect that the client was responsible."
I would also remind you that, unlike you, most investors are focused on other areas of knowledge with which they earn their living and many simply do not have the time to gain the know-how to make a truly informed assessment.
Who was flogging Portus? Were they all "grey" and "white" hats who grabbed their 8% to 12% fees? The problem is that corruption is the norm, not the exception. "I will say for sure that self dealing is the norm, rather than putting client interest first, and if that is corruption, then she is calling a spade a spade.
How can an investor protect himself when we have such a lack of transparency in so many areas?
"The vast majority of advisors" are being instructed to sell in-house wrap funds etc., in order to meet their $500,000-per-year quotas, so how can they "try to align themselves with the needs of their clients"? Brokers are afraid to speak out. (Advocate comment with twenty years in, TRUE)
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OSC answer re salsepersons posing as advisors

Postby advocate » Sun Jun 19, 2005 9:49 pm

I asked the following question at the OSC town hall, and was given the answer below. (which I am not sure answers fully how they are allowed to mislead clients............)

18. Why are investment salespeople who are officially registered as either "registered representatives", or as "salespeople", at the Securities Commission, allowed to represent themselves to the public as "investment advisors", indicating a different level of fiduciary duty to the public, when the Securities Act is clear on which titles are allowed and which are not?
The OSC registers individuals in the categories of salesperson, officer, director or partner. These categories are then further designated as trading or advising. The firm can be registered as either a mutual fund dealer, an investment dealer, or as investment counsel or portfolio manager (ICPM). The latter ICPM category is what we refer to as an adviser (spelled “er”). While advisor (spelled “or”) is widely used in the industry to represent a salesperson or representative, it is not a registration category. The OSC does not register job titles.


Before investing, investors should check the registration of anyone selling securities or offering advice with the OSC. They can do this on the OSC website, or by calling the OSC Contact Centre.

(advocate comment: (or question) If the Securities Act is clear on what is allowed or not allowed as a title, is the OSC answer just another example of them passing the buck? What am I missing?
advocate
 

Investment Industry codes of silence

Postby admin » Sun Jun 19, 2005 6:23 pm

similar to the forum on coverups, this forum is hoped to gather examples of the famous industry code of silence that still fourishes in the investment industry

let us know if you have any examples to illustrate this

My example, to be given as evidence in legal suit against RBC was the prohibition by the firm of allowing the public to be informed of commission free mutual funds

they realized it was a huge advantage to the client, but threatened and harassed me at ever turn when I was in the business when I advertised it. If anyone has experience in this or any other example of the code of silence in the industry, pass it on.

(please post it under the relevant topic, dont open and new topic on every comment)
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US verses Canada

Postby advocate » Tue Jun 14, 2005 4:53 pm

check out the NASD (National Association of Securities Dealers) in the US for some interesting contrasts to Canada

There they actually measure advisor behavior that is not serving to clients and self serving to advisors, and place warnings on their site about them, enforce fines and cause investors to be compensated.

Canada it is still a buyer beware world, where the foxes are firmly in charge of the henhouse. I heard Sandra Gibson comment in the Post the other day, "The problem is that corruption is the norm, not the exception." Sadly I have to agree, after my twenty years experience in the industry. There will come a time when the public is as informed, but so far most are still under the impression that they are being protected in Canada.
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advisor fraud, professionals, or salespeople masquerading?

Postby admin » Mon May 16, 2005 8:43 pm

lots to discuss here

Lots of mutual funds sold at highest possible cost to client, highest possible remuneration to salesperson

Larry believes the securities act does not even allow for those calling themselves "advisors" today to use this title. Misleading. More to come.
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