fiduciary or not? a "Bait and Switch" game

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fiduciary or not? a "Bait and Switch" game

Postby admin » Fri Mar 25, 2011 7:08 pm

A securities dealer may perform a variety of functions. First, in his most common role, the dealer is an intermediary. He buys and sells securities on behalf of his client, in accordance with the client's instructions. The dealer is in no way involved in the management of his client's portfolio and has no discretion regarding its content and [page650] the transactions to be carried out. In this situation, the client's account is sometimes referred to as "non-discretionary".

The above paragraph is from a court case called LAFLAMME v PRUDENTIAL-BACHE Co File No.: 26659 Supreme Court of Canada 1999: November 2 / 2000: May 3.

I print it to show how the courts (and the investment dealers) use this "antiquated" thinking to NEVER have to owe a duty of care to their customers. I know. I was a broker from 1984 until 2004. I watched the entire game change before my eyes.

In late 1987, or early 1988, after the great crash of Oct 1987, they took away our business cards that said "stockbroker" on them, and gave us new cards that said "investment advisor". Marketing felt that "stocks" were a dirty world, and that we would succeed bette with "advisor". And so off we went as "advisors". It was not until long after I was retired in 2004, that I ever learned that my license and registration category was always "salesperson", as was nearly every person in Canada calling themselves "advisor". Our industry is an 800 lb gorilla, in that we get to do "whatever we want", regardless of rules, codes, or nice words. We police ourselves, we are self regulating, we take the high moral ground by virtue of this, and we then can do immoral things with it for money. Nobody could stop us. Police stayed away, Courts deferred to our "self regulators". We were a force unto ourselves.
I was not on side with this "high moral ground" thing. I am just letting you know how it was.

this forum topic will try and condense down the aspects of fraudulently misrepresenting the role of investment product sellers in Canada, and how they have captured a place in the public minds of "trusted advisors". Further how we have misused this placement to abuse and cause financial violence to our customers, with seemingly no consequence to ourselves. Nice work if you can get it.
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