Broker/Advisor Disguise and Deception

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Guest Post by Ken Kivenko, Kenmar Associates, Investor Education and Protection

June 1, 2016

Misleading “ Advisor “ Titles

June is seniors month in Canada .

Regulators will warn people to check registration and to look out for fraudsters. The sad fact is Canadians lose more money from registered “ advisors” through a number of devious tricks. One of them is to use titles that mislead.

Canadian financial consumers of financial services and products are confused about their advisors' obligations to them. The industry is rife with an alphabet soup of titles that have no legal standing, designations that split according to industry sectors, and standards of proficiency that range widely. Commonly used business titles include advisor, financial advisor, investment advisor, financial planner, wealth advisor, and investment associate.

The actual registration is salesperson or dealing representative.

Many of these business titles do not, on their own provide a meaningful description of the type of services and/or investment products that a licensed representative can offer to a client. The requirements to earn and maintain these financial designations vary greatly. Some professional designations take years of work or classroom study, while others can be obtained after a weekend seminar or through online self-study. Some titles are nothing more than marketing tools .

Simply put, the criteria to obtain and maintain these various financial designations vary widely. Very few firms provide clients with any explanation of what these financial designations mean in practice.
Seniors are a special target. Some financial professionals use designations that imply that they are experts at helping seniors with financial issues. Many seniors, however, don't understand the sets of initials that may follow the names of these financial professionals or the meaning of the titles - such as "senior specialist" or "retirement advisor" - they use to market themselves.

The education, experience, and other requirements for receiving and maintaining a "senior" designation vary greatly. In some cases, a financial professional may need to study and pass several rigorous exams - after working in a designated field for several years - to receive a particular designation. In other cases, it may be relatively easy in terms of time and effort to receive a "senior" designation, even for an individual with no relevant experience.

Here’s some Videos that illustrate the use of misleading titles:

https://youtu.be/8_K4pqx4kIc?list=FLy8d ... JBa_l0w7AQ Cary List FPSC gets to the point in about 35 seconds in this video

http://www.cbc.ca/player/play/2685049949 CBC news also gets to the point in less than the first minute of this video

We encourage you to thoroughly evaluate the background of anyone with whom you intend to do business - before you hand over your hard-earned cash. You also should ask questions - that's the best advice we can give you about how to invest wisely. We see too far many investors who might have avoided trouble and losses if they had asked basic questions from the start.

More of Ken Kivenko's work on investor protection and investment system best practices can be found here: http://www.canadianfundwatch.com

CAVEAT EMPTOR
Thanks to Larry Elford for his assistance

[admin]

https://www.linkedin.com/pulse/financia ... es-robbins

What a great article and info from Tony Robbins!!


The Financial Services Industry Needs to Stop Bullying Its Customers. Here's How.
Mar 31, 2016
In this series, professionals debate the state – and future – of their industry. Read more here, then write your own #MyIndustry post.

We can all remember a time during our formative years when a bully used their position, power or sheer physical presence to push around someone who seemed like an easy target.

At 5'1" my sophomore year of high school, I was the short fat kid who wanted to “change the world” — not a popular thought at that stage of life. Although wrapped in a temporarily small package (I am now 6'7"), I was fiercely protective of anyone who was suffering under the tyranny of these kind of kids.

The nose guard of our football team was one such buffoon. He was 6'2" and almost 300 pounds. During lunch one afternoon, I witnessed him pouring chocolate milk over the head of my helpless friend while he laughed to the applause of his band of letterman-jacket cronies. Without missing a beat, I got in his face. After a barrage of colorful language that caught him by surprise, I threw the hardest punch I could and ran like hell. Unfortunately, I wasn’t very fast!

Decades later, I still do not tolerate bullies.

The bullies of the financial services industry are those who extract as much value for themselves to the detriment of others.

I don’t think there is an educated person in America who doesn’t think that the system feels set up for those in the know. The rest are left out in the cold.

In 2008, while watching many of my friends and clients lose half of their nest egg to the market crash and real estate crises, it struck a deep chord. Having grown up with very little, I was reminded of the pain. These weren’t just statistics to me. I was reminded of nights where my own family went with little or no food. That fearless high school kid in me was kicked into gear. I knew I had to take action.

For decades now, I have been blessed with the incredible gift of “access.” Access to some of the most brilliant minds and peak performers in their own fields.
I’ve had the privilege of coaching Paul Tudor Jones, one of the top 10 traders in financial history, for 22 straight years now. He hasn’t lost money in any of those 22 years. As his coach, I have been inside the ropes, and what I have learned from him has been invaluable to my own situation.

In early 2009, I thought, what if I sit down and get 50 of the top financial minds, from Carl Icahn to Ray Dalio to Warren Buffett to Vanguard Founder Jack Bogle… and more? I wanted them to share their own perspective, and I asked them, “Is the game still winnable for the average person?” Even in a world where 70% of the daily trades are made in microseconds by supercomputers.



The good news is that the answer is yes! And I was able to extract the specific strategies and tools in my #1 New York Times best-seller Money: Master the Game, which just this week we released in paperback and is available for FREE (just pay shipping & handling). Go here to pick up your copy.

Note: I dedicated 100% of the profits from the hardcover to the top hunger relief organization “Feeding America,” and I proud to say that we have provided over 102 million meals so far to people in need!

The foundation of winning the game of money is that you MUST know the rules of the game before you blindly throw your money at a bunch of mutual funds your brother-in-law wants to sell you. Or before you trust your 401(k) to get you through your golden years. For example, 67% of investors think they pay no fees in their 401(k), when in fact it’s a gravy train for the brokers, plan providers, and mutual funds that are on your plan menu. Heck, the 401(k) industry didn’t have to disclose their fees for over 30 years! Now they offer you 30-50 page disclosures that you and 99.9% of people have never seen nor read. They are opaque at best, predatory at worst.

I had one singular outcome when I set out to write the book — to help people become the chess player, and stop being the chess piece.


One of the foundational lessons to becoming the chess player is to find a highly qualified advisor who doesn’t have conflicts of interest. It’s common sense that’s not so common. You wouldn’t believe the level of abuse and the lengths the major firms go to in order to mask these conflicts in the multi-trillion industry of wealth management.

I have educated millions of people now on the difference between a fiduciary (also called a registered investment advisor, or RIA for short) and a broker. A broker sells and receives compensation for products or funds, while a fiduciary is required by law to put your interests first. I am a firm believer that the advice you receive should be separated from the products or funds you buy. Would you go to a doctor who manufactured and sold his own medicine? Of course not! But the vast majority of the financial industry isn’t legally obligated to put your interests first like a doctor. You heard me right. Well over 90% of financial advisors in this industry are brokers. They don’t call themselves brokers, of course. Their titles are financial advisors, wealth managers, etc.

The vast majority of people I meet, both the sophisticated and unsophisticated, are still unaware of the difference, or they wrongfully assume their advisor is a fiduciary (hint: nearly all name-brand firms are brokers in disguise). If your financial advisor is with a firm that has their name on a sports stadium, blimp or race car, there is a high probability that they are a broker. They are master marketers, and they make it feel or sound like they are giving unbiased advice, but we would be naïve to think that their own pockets aren’t the priority.



Go here to watch behind-the-scenes, exclusive footage on this topic.

To be sure, many advisors are wonderful and committed people who truly believe they are doing what’s best. This is by no means an assault on their character or good intentions. But one can be sincere and sincerely wrong. Most advisors are trained by and work in a system that is hardwired to make money for the “house” and reward those who produce sales. Compensation drives behavior, so they certainly don’t wake up each day seeing the conflicts as an issue. As Upton Sinclair famously said, ‘It’s hard to get a man to understand something when his salary depends on him not understanding it.”

Over the past couple years I went on countless talk shows, radio shows, wrote articles and created videos, all with the intent of educating Americans on the damage caused by this broken model where the person you trust with your financial future is rewarded for selling high-commission products, proprietary funds, while layers of hidden fees go unnoticed.

And although we’ve come a long way in sharing the truth, I’ve recently learned we have a new problem. And it’s even worse!
Nearly a year after the first edition of my book was released, I was introduced to Peter Mallouk — an impressive guy, even by my standards. He is, by all accounts, the epitome of excellence in the wealth management world. Peter and his firm, Creative Planning, manage nearly $20 billion in assets and carry a number of prestigious accolades — including being the only wealth manager in history to have been ranked #1 Independent Financial Advisor in America by Barron’s three years in a row. And they are also now ranked the #1 Wealth Management Firm in America by CNBC for the second consecutive year. It’s great to see a true fiduciary topping the charts. Creative Planning’s typical client is the millionaire next door, but they also have an elite group that works the ultra-wealthy ($10 million or more).

Peter and his team, with a little arm twisting from me, recently went from serving only higher net worth folks to opening up a new division to accept smaller accounts. His team will provide a complimentary second opinion to anyone and help them uncover the layers of conflicts, hidden fees and proprietary funds in their current scenario. A free second opinion from the #1-ranked firm is a no brainer. (http://www.TheNumberOneFirm.com)

Peter had asked for a meeting with me, knowing my passion for protecting clients and my commitment to real and absolute transparency in the personal financial sector. What he shared with me left me completely disheartened.

After years of trying to educate millions of people on the difference between a broker and a fiduciary and stressing the need for a fiduciary standard, Peter showed me a mountain of evidence that many “fiduciaries” were exploiting a legal loophole to make additional revenue off unsuspecting clients.

How so? It turns out that fiduciaries can moonlight as a broker when it suits their pocket book. You heard me right.

Somehow, regulators will allow advisors to be both a fiduciary and a broker through a process called “dual registration.” One foot in both camps. Talk about a wolf in sheep’s clothing.

That’s like sitting in your doctor’s office and after diagnosing you, he prescribes you a medication that he mixes up in the backroom and sells at a profit! We would never accept such a conflict!

“It gets worse, Tony!” Peter carried on…

“Some fiduciary advisors are actually receiving additional fees and kickbacks for directing people to specific funds under the guise of 'shareholder services fees' or 'consulting fees.'

Or, in some cases, they have been so brazen as to sell proprietary products under different names where they made more money for recommending an inferior product! And although disclosed in fine print, the client is unsuspecting.”

I was dumbfounded and disheartened, but I also know that we must empower people with knowledge they need to avoid these land mines.
There are lots of high quality firms out there, so I asked Peter to

give people the criteria they need to first discover if they are working with a broker or not, and then how to make sure the fiduciary you select is operating solely in your best interests...

Aside from making sure that the firm is registered with the SEC as a registered investment advisor, the most important criteria is to make sure that that person/firm is not affiliated with a broker dealer

(and ask for it in writing.) This is the “dual registration” I explained above. (Tip: If the advisors website or email says “Securities offered through […],” you are dealing with a broker.)

Make sure your advisor does not offer any proprietary funds.

Some firms create their own products/funds to increase revenues and then put those products in their client’s portfolios. In other words, you may be paying a firm to advise you to buy their own products! If you are paying for investment advice, you deserve to expect that the advisor is selling you investments as well. (advocate comment here: "I believe that this last line should read, ....you deserve to expect that the advisor is NOT selling you investments as well. I could be wrong but I think the editor missed the word NOT)

Make sure the registered investment advisor is compensated based on a percentage of your assets under management — and

never more than 1.25% in annual advisory fees for comprehensive financial planning. Preferably this number should be 1% or even less if you have substantial assets to invest.

Be sure there are no “12b-1” fees, shareholder service fees, consulting fees or other “pay-to-play” fees.

Make sure the registered investment advisor is not compensated for trading stocks or bonds.

If you are a bond investor, the most flagrant fouls in this industry are the “markups” charged by the broker and the firm. (Tip: If your advisor says you pay no fees on your bond portfolio, beware! Ask specifically if any bonds are “marked up.”)

Don’t just give an advisor your funds directly. You want to make sure that your money is held with a reputable third-party custodian

, such as Schwab, TD Ameritrade or Fidelity, which offers you 24/7 online account access sends monthly statements directly to you. (Note: A fiduciary using a firm like ones named above to custody your investments is NOT the same as the retail branch of these firms.)

When looking at an advisory firm, be sure the firm has educated and credentialed advisors on board. When you go to a doctor, you want to make sure they have the M.D. credentials to back it up. The Certified Financial Planner designation, CPAs and attorneys are all good qualifications to have on your financial team.
Since penning this article, I have decided to align myself with Creative Planning by becoming a board member and Chief of Investor Psychology. My mission is to help people from making poor emotional decisions during volatile times and help them connect to their core purpose so that they will take control of this area of life.



After all, we aren’t really after “money” per se. We are after the emotion that money gives us. Freedom, security, comfort, contentment, or whatever it is for you. But what if we could tap into the emotion we really want, so that we enjoy the journey to financial freedom and not wait “until” before we give ourselves permission to have an extraordinary life.

Live Strong and Live with Passion!

Tony

Note: As part of their efforts to educate and empower investors, Tony and Creative Planning have launched “Second Opinion.” This program, which is available for free on Creative Planning’s website, analyzes a client or prospect’s financial statements to uncover potential red flags in their existing portfolios such as proprietary funds, high-commission products, underperforming funds, and more.

[admin]

Update from the ASC as of April 19th, 2016

(shortened version is this ......we exempt the laws for any investment firm, however we may or may not apply the laws of Alberta to those same firms, depending ......:)

Below is the actual reply to a complaint to the ASC of license concealment and misrepresentation by an ASC registrant:

Good morning Mr. Elford,

Thank you for your March 21, and April 17,2016 emails.

The ASC is responsible for administering Alberta securities laws, including investigating, prosecuting and sanctioning breaches. ASC staff will review your concerns to determine if they relate to issues within our jurisdiction, and whether they point to possible breaches of Alberta securities laws. If they do, we may conduct further investigation, discuss the issue with the business or individual(s) involved, and if appropriate apply to have administrative or other sanctions ordered against wrongdoers. If our review indicates that the matter is not one that the ASC can address, we may refer the issue to another organization or even take no action and close our file. Not all complaints result in an investigation or public sanction.

If the ASC requires additional information, staff may contact you. However, you may hear nothing further, and even if we do contact you for more information, we cannot discuss any details of our investigations with you.

Under Section 45 of the Alberta Securities Act, ASC complaints and investigations are confidential until brought to the point of a hearing or enforcement action, at which time, all relevant evidence must be disclosed to respondents, complainants may be called as witnesses, and certain details are posted at the ASC website at http://www.albertasecurities.com. While we will take reasonable steps to ensure confidentiality and protect the identity of complainants, during the course of an investigation, the identity of complainants may become obvious to suspects.

Regards,
Dolores Ivany-Fagan
Assessment Officer



complaints

Alberta Securities Commission
Suite 600, 250-5th Street SW,
Calgary, AB, T2P 0R4

Tel: 403.355.3888
Fax: 403.297.2210
Email: complaints@asc.ca
http://www.albertasecurities.com

THIS MESSAGE IS INTENDED ONLY FOR THE USE OF THE ADDRESSEE AND MAY CONTAIN INFORMATION THAT IS PRIVILEGED AND CONFIDENTIAL. If you are not the intended recipient, you are hereby notified that any dissemination is strictly prohibited. If you have received this communication in error please reply to the sender immediately.-----Original Message-----
From: larry elford [mailto:lelford@shaw.ca]
Sent: April-17-16 3:07 PM
To: larry elford; Don Rodgers
Cc: complaints
Subject: Re: Complaint to Don Rogers and ASC Complaints, regarding deception and license misrepresentation contrary to Alberta Securities Act and harmful to the public interest

Dear ASC.

As nearly one month has passed since initiating a complaint with the ASC about “dealing representative” misrepresentation (license misrepresentation), I was hoping to obtain a reply indicating receipt of the complaint, and perhaps some indication if anything is to be done.

I thank you in advance for your reply to this consumer protection issue.

Larry Elford

==========================

March 24, 2016

Email:
complaints@asc.ca
Fax:
Attn: Assessment
(403) 297-2210
Mail:
Attn: Assessment
Alberta Securities Commission
Suite 600, 250–5th St. SW
Calgary, Alberta, T2P 0R4
Phone:
(403) 355-3888

This complaint involves the following conduct of registrants under the ASC:

1.

Concealing the license or registration category of the registrant, contrary to section 100 of the Alberta Securities Act.

2.

Hiding the commission or fee-based “salesperson”-role, of the registrant. It seems ironic to allow “trusted” participants under the supervision of the ASC, to gain the trust of customers through the use of an industry deception.

3.

Concealing the license or registration category of a registrant also brings with it the effect of hiding the agency duty-of-care, and the degree of loyalty owed to investors.

The public is left in the dark as to whether the loyalty implied is a true fiduciary loyalty, or a ruse based on a misrepresentation.




Complaint Particulars

On Saturday, March 19, 2016, an advertisement was placed in the Lethbridge Herald newspaper announcing a new investment “advisor” being welcomed to the Lethbridge office of CIBC Wood Gundy.
 
Upon doing a registration search for the person being announced in the ad, it shows this individual (Margaret Purvis) is actually registered in Alberta as a “dealing representative”.

Enclosures:

Page 3 Copy of Saturday, March 19, 2016, advertisement placed in the Lethbridge Herald newspaper by CIBC.

Page 4 Copy of National (CSA) registration search showing this person a “dealing representative” and NOT an advising representative (not an advisor, nor an adviser under the law)

Page 5 Copy of the CSA registration categories and descriptions, showing the “dealing representative” category and description.

Page 6 Copy of the CSA registration categories and descriptions, showing the “advising representative” category and description.

Page 7 Copy of Alberta Act Section 100, “Representation or holding out of registration”
100(1) A person or company shall not represent that the person or company is registered under this Act unless…..continued



Advertisement:

Copy of National (CSA) registration search showing this person a “dealing representative” and NOT an advising representative

Copy of the CSA registration categories and descriptions page, showing the “dealing representative” category

Copy of the CSA registration categories and descriptions, showing the “advising representative” category ([i]THIS is the category required to call oneself an "advisor" or more properly "adviser" in Canada.)

Below is copy of the relevant section of law, The Alberta Securities Act

http://www.qp.alberta.ca/documents/Acts/s04.pdf

Representation or holding out of registration
100(1) A person or company shall not represent that the person or company is registered under this Act unless

the representation is true, and

(b) in making the representation, the person or company specifies the person or company’s category of registration under this Act and the regulations.

(2) A person or company shall not make a statement about something that a reasonable investor would consider important in deciding whether to enter into or maintain a trading or advising relationship with the person or company if the statement is untrue or omits information necessary to prevent the statement from being false or misleading in the circumstances in which it is made.

http://www.qp.alberta.ca/documents/Acts/s04.pdf

Violations may include, but are not limited to:


Principles of fairness, honesty and good faith are the simplest and most basic rules required under IIROC (investment Industry Regulatory Organization of Canada)

Competition act provisions against misrepresentations made to the public, even those based upon size, strength or abuse of market dominance.

Fraud provisions Sec 380 and fraudulent concealment provisions Sec 341 of the Criminal code of Canada

Misrepresentation rules of IIROC, industry self regulator

Rule against dishonest treatment by an agent or in contract law as provided by Supreme Court rulings in last year or two. (Participants in a contract or agreement owe a duty to be honest with the relationship….. or the equivalent)


This complaint appears to be an example of deceiving the public. I look forward to a reply from the ASC on this matter.

Larry Elford

[admin]

BIG BOX LIES……INVESTMENT SALESPEOPLE IN DISGUISE

A few years back there were several big box electronics stores in my area. After a time it became known that one of those stores was keeping a couple of secrets from its customers.

The first secret was that their salespeople were on a commission, and they had hidden incentives to sell things that were more expensive (or more profitable to them) than necessary.

The second secret, was that the retailer was known for buying up boatloads of last year’s electronics models, or older stock, and not telling its customers that they might be buying an older model.

The first secret, led to other, more ethical retailers to start a campaign that said, “all our staff are non-commission”. “We are here to help you to get the best product at the best price”.

This same game of secrets is taking place with the retirement and investment savings of tens of millions of North Americans. See what Barrack Obama says about this here https://youtu.be/GQXJx23acxY In Canada we are silent for polite Canadian reasons, and some not so polite reasons.

In the investment industry 99% of salespeople (aka “advisors”) are also on commission, and they can and do find that their dealers have some bad investment products to sell

(see THE BIG SHORT movie).

In contrast there are financial professionals (search FIDUCIARY topic) who are paid a fee to NOT take advantage of the customer, and to serve them as one would expect from a professional. Like a Doctor is required to do. (the good guys:)
This link quickly shows how a former TD Bank CEO and Tony Robbins describe those two roles https://youtu.be/23xWWsGp6vU Quite a surprise with what truth the banker carelessly reveals.

The trouble isn’t that there are “salespeople” in the investment products business.

The trouble is that 99% of those on commission, (aka broker, registered rep, salesperson, “advisor”) are hiding this fact from their customers, just like the old electronics store did.

“Advisors” in Canada cleverly conceal the four most important items from customers:

Hide their exact license. Hidden. They will call themselves by a title,

usually one that sounds amazingly close to what a professional would use, like “advisor”, when the lawyers (and some securities regulators) will tell you this is not the legal word used in the Securities Act. (The legally followed word is “Adviser”) Too unbelievable? Canadian Securities regulators have admitted that this is the case, and FINRA in the USA has placed some hints on their website, but no, they are not warning the public… https://youtu.be/xoLiM40SD7k

Hide the agency duty of their license (to whom do they owe a loyalty to , the client, or their dealer?

Realtors MUST disclose to whom they owe an agency duty to, every time. “Advisors”?…Never.

Hide their true role as a commission salesperson.

Hidden.

Hide the hidden incentives of their dealer which might cause the salesperson to sell a less than stellar investment to you. (see SUITABILITY as a loophole here) https://youtu.be/aWulI3Kwi_A

They conceal these important things because deceiving the public on these four things is essential in being able to better earn the investors trust. Trust the the thing that causes investors to give their money to the “advisor”.

The retail investment industry chooses to lie to you to more readily gain your trust……..does anyone else see the irony in this business model?

This link talks about using false titles to fool and deceive investors, a

Quebec Superior Court Judge uses the word “fraud” 155 times in a case involving a CIBC “advisor”

. http://investorvoice.ca/Cases/Investor/ ... _index.htm

The Canadian Securities regulators and self regulators, all paid from money derived from the investment industry, should be telling investors this, as should the US regulators like the SEC, FINRA, SIFMA. But they choose not to rock the boat, and remain silent instead. Job security?

In Canada there is even a new 2016 initiative, called the Client Relationship Model (version 2) (CRM2 is the acronym) In this NEW and IMPROVED disclosure process, they have still failed to come clean on the secrets above.

I call it “CRIME 2” for them to allow consumers to be deceived so completely

by people who could be selling old electronics……Please let your politician know this is unacceptable in our country.

For more information on this topic, view some videos on youtube, they are in order of the most recent ones displayed first. https://www.youtube.com/user/investorad ... ature=mhum

Also visit the flogg topic titled Advisor Disguise/Deception at http://www.investoradvocates.ca

If you wish to join a social media group that tries to alleviate financial abuse by financial professionals, please join in at https://www.facebook.com/groups/albertafraud/
(this group has expanded to encompass Canadian and U.S. systemic abuses)

or https://www.facebook.com/groups/240100382792373/ Small Investor Protection Association of Canada

Twitter users can find me at @RecoveredBroker

Join the parade of investors and ethical investment professionals who seek to escape the “bait and switch”, of the commission salesperson, and find ethical professionals.

Read the entire case judgement about Margarin v CIBC here http://investorvoice.ca/Cases/Investor/ ... _index.htm

[admin]

(This posting refers to U.S. broker self-regulator FINRA, Canadian self-regulator IIROC is covered on the following post)

"Self" regulation in finance, is often simple decriminalization...lets see how FINRA does it to America

Imagine being able to call yourself a "doctor" simply by changing ONE VOWEL of your title, and skip the seven years and $300,000 cost of medical school....

Well, thanks to the folks at FINRA, and the concept of "self" in self-regulation, this is approximately what over a half million commission investment salespersons have been doing to the American public.

First fool them with a false title, second, sell them investments which the deceived customers think are in their best interest...but sales stats show, and experts know, that the non-fiduciary, non SEC licensed person is most often a mere salesperson (with a broker license and not adviser license) in "advice giver's" disguise.


FINRA:

Although most people would use an "o," we purposely spell adviser with an "e" when we talk about investment advisers.

FINRA:

That’s because the laws that govern this type of investment professional spell the title this way.

http://www.finra.org/investors/investment-advisers

Professional Designations

FINRA Rule 2210 prohibits brokerage firms and brokers registered with FINRA from referencing legitimate degrees or designations in a misleading manner or referencing non-existent or self-conferred degrees/designations.

FINRA’s page on Understanding Professional Designations will help you learn more about professional designations http://www.finra.org/sites/default/files/registered-representatives-brochure.pdf

All securities professionals associated with a broker-dealer, including salespersons, must register with FINRA

. Salespersons may not conduct any securities business with public customers until all required registrations are in effect. from [url]http://www.finra.org/sites/default/files/registered-representatives-brochure.pdf
[/url]

FINRA, the "Self" Regulatory body, despite having rules forbidding the misrepresentation of brokers registered under FINRA, these rules are seemingly ignored by FINRA brokers who prefer the marketing term "advisor" since it sounds so cleverly like an SEC or State registered legal term "Adviser". I believe this to be an intentional misdirection of consumers, since virtually none are expected to know the underlying legal rules and different legal meanings between the legal term "adviser" and the non-legal word "advisor".

This intentional misdirection of the consumer is fraud, when it is done is such a clever, known and widespread fashion, despite rules and laws to the contrary.

FINALLY, this from the SEC:

Individuals that are Registered Representatives of a Brokerage firm that are listed in FINRA's BrokerCheck system will also appear in search results.

All of SEC references use the legal spelling of "Adviser". All other references point to FINRA persons licenses as either "registered representative" license category (representative means they "represent" the dealer as agent, and not the client) (see link below for source)

I believe that if a FINRA member is referring to themselves as an "advisor" that this is an intentional effort to mislead the protective obligation, skirt the agency disclosure, and hide the license category of that person, contrary to any industry rules and laws.



http://www.adviserinfo.sec.gov/IAPD/Default.aspx

Securities Exchange Act of 1934
Rule 15c1-2—Fraud and misrepresentation
Rule 15c1-3—Misrepresentation by brokers, dealers and municipal securities dealers as to registration http://www.finra.org/sites/default/files/Series_9-10_Outline.pdf
FINRA Rule
1030 Series—Registration of Representatives
2010—Standards of Commercial Honor and Principles of Trade
2200. COMMUNICATIONS AND DISCLOSURES
http://finra.complinet.com/en/display/display.html?rbid=2403&record_id=11317&element_id=8255&highlight=2200#r11317

[admin]

(This posting refers to Canadian self regulator IIROC, U.S. self broker regulator FINRA is covered on previous post)

Visit IIROC at http://www.iiroc.ca/Documents/WhyMatterBrochure_en.pdf to see why they feel they matter to investors.....

And yet.....they allow some 150,000 people in Canada to misrepresent themselves and their license or registration category from to investors. Deception? Fair? Honest? Good faith or fraud?

click to enlarge this image (or read the quote below for it's wording)

*Use of the word Advisor – what this means:
In this investor brochure, we have used the general term “advisor” to refer to a number of offcial regulatory approval categories such as Registered Representative and Investment Representative. Please note that “advisor” is not an of cial IIROC approval category for individuals working at IIROC-regulated rms. ”Advisor” is also not being used in this brochure to represent an offcial registration category.

Yes, IIROC, which evolved out of the old Investment Dealers Association (IDA) (which had a horrific record of industry conflicts on interest), may not be as evolved away from their industry crony habits as they would like us to think. Case in point, is that they blindly allow Canadians to be deceived, while promising that they will be protected. What is that about IIROC?

The following says

"Don’t forget to ask if your firm or advisor is regulated by IIROC."

click to enlarge this image

Perhaps it should state that IIROC does not even consider the word "advisor" to be legit.....Cant make this stuff up folks. (See the movie THE BIG SHORT to get a fair and honest glimpse of what regulation really looks like in the financial industry. They portrayed it more honestly than do the regulators. Seriously.

https://youtu.be/LWr8hbUkG9s

[admin]

 "investment advisers are not the same as financial advisors and should not be confused" FINRA quote

How Investment Dealers Fool ALL of Their Clients, ALL Of The Time...(with a little help from "regulators":)

Three tricks that the Investment “Advice” industry uses to deceive the retail investment customer

A lesson in self deception and cognitive dissonance for every customer of an investment broker/dealer.

1.   When the dealer says “trust us, we are “Advisors”, they are using that word as a “verb”  (verb meaning, : a word or phrase that describes an action, condition, or experience)

2.  When customers hear “Advisor”, their minds imagine a “profession”, like the profession of being a lawyer, an accountant or a Doctor.  

3.  The Securities Act of each province or territory carries rules or laws, specifying that they cannot mislead consumers in this fashion…..but captured regulation provides the perfect distraction from application of those laws, which interfere with profits.

There are three reasons for this congnitive dissonance:

1. The first reason the customer hears it incorrectly, is because the investment industry intentionally sells it in it's most misleading manner, with millions spent on advertising, promises of trust and integrity, on their web sites, etc.  Look at the advertising promises of your “advisor” and dealer, and see if they do not promise integrity and trust.  They were the top promises at RBC where I spent 17 years.


2.  The second reason the industry sells financial "advisors" to the public is to avoid a legally binding license and registration category found in each Securities Act.  This legal category is “Adviser.”  (spelled lawfully with an “e” at the end of the word, instead of “o”)  

3.  Third is the common belief that Securities Commissions would never allow such deceptive practices (violations to Competition Bureau laws) to be done to the public. This belief is yet another falsehood that enables the industry to profit greatly from each investor's own misguided assumptions.

This legal registration category (Adviser) does bring with it a duty of care similar to that owed by a Doctor or a lawyer.  It is called a “Fiduciary” duty and it is backed by a few hundred years of sound legal tradition.

When the typical investment customer sees or hears the word “advisor”, from someone representing a bank or a reputable corporation, they assume just what the Corporation hopes they will assume.  They are given no information and no way of differentiating it from the legal category of “Adviser” and they are given every opportunity to assume their non-fiduciary “advisor” is the same as the legal fiduciary “Adviser”.

This is an industry-wide lie by omission.

Such lies were prohibited at each bank that I worked at……while also being embraced at the banks where I worked.

Canadian Securities regulators have admitted, after 15 years of hiding from the public, that this spelling trick is not imagined. Several Commissions have stated that they consider “Adviser” to be a LEGAL term found in the Act, and that the title “Advisor” is out of their regulatory jurisdiction and not a matter for their consideration.  

(They have not yet "cottoned on" to the illegality of 150,000 Canadian reps lying to the public about their “advisor” status…..but I digress)    (some of their written replies on this question found here:  http://www.investoradvocates.ca/viewtopic.php?f=1&t=193

In the US, FINRA is the self regulatory body, and they say this:

 "investment advisers are not the same as financial advisors and should not be confused. The term financial advisor is a generic term that usually refers to a broker (or, to use the technical term, a registered representative).”

 

“By contrast, the term investment adviser is a legal term that refers to an individual or company that is registered as such with either the Securities and Exchange Commission or a state securities regulator. 

Common names for investment advisers include asset managers, investment counsellors, investment managers, portfolio managers, and wealth managers” http://www.finra.org/investors/investment-advisers#sthash.GDhp5cJ3.dpuf



FINRA also says;

“Although most people would use an "o," we purposely spell adviser with an "e" when we talk about investment advisers. That’s because the laws that govern this type of investment professional spell the title this way.”

http://www.finra.org/investors/investment-advisers#sthash.GDhp5cJ3.dpuf



Footnotes:  In the US, search BROKERCHECK here to see how your broker/adviser/adviser/whatever is registered:  http://brokercheck.finra.org

(Investor Caution: If your rep is registered in TWO categories, it is important that professional steps be taken to understand WHEN they are wearing each of their two very different hats....)

Dealing Representative means I represent the Dealer, not you...

In Canada, search CSA here to see how your “self titled “advisor” is registered.   (Remember that Dealing Representative means
"I represent the Dealer, not you”)   [url] http://www.securities-administrators.ca/nrs/nrsearchprep.aspx?ID=1325[/url]


“Advising Representative” is the legal category in Canada which is required in order for one to refer to themselves as “adviser” (or any variation of that word’s spelling according to some Securities Commissions).

#FINRA  "investment advisers are not the same as financial advisors and should not be confused"

A cautionary note about FINRA and Canadian regulators promise to protect the public:

The Canadian Securities Administrators (CSA) have gone to great lengths to hide, or conceal the exact category of the salesperson/advisor.

 As recent as 2016 changes were made to add additional layers of complexity to the search function at the CSA, leaving it fairly incomprehensible to the average person just what category their investment representative is registered in, and what it means.  

The result is that the Canadian search site appears to try and give easy access to search any “advisor” to see if they are indeed registered with the proper authority, while (cleverly again:) doing their utmost to hide from the public what exact category that person is registered in.  This is so apparent to users who are familiar with the CSA, that it calls into question their very ability to regulate this industry.  

$700,000 salaries, when paid by the industry, make even a government regulator pay attention to who is calling the tune...

The legal category of “Dealing Representative” was in the law as “Salesperson” until September, 2009, and many investment salespersons can be searched historically, to show this.  Again, this is something that the CSA is making difficult to see for an average web-site user, and it seems clear that revising history is the goal.  

Suggestion to protect your finances:

The industry and its captive regulators claim that investor education is important and suggest that the investors themselves are responsible for their investments while at the same time they claim that they (the regulators) offer investor protection which lulls the public into a false sense of security and leads them to place complete trust in their “Financial Advisor”.

The first and fundamental step in investor education should be to make people aware that the Regulators state that the titles “Financial Advisor” and even “Vice President” are unregulated business titles that can be used by anyone.

The second step is to make people aware that anyone using the title “Financial Advisor” is either:
1. An unregulated fraudster, or
2. A regulated “Dealing Representative – A sales person” whose only responsibility is to sell suitable products. He has no legal responsibility to look after his clients best interests or to have “Fiduciary Duty”.

If investors achieve this first level of awareness they will significantly reduce their risk of losing all of their savings as many people do every year when they place their complete trust in a commission motivated sales person.  

Finally if you were to find any of the professionals mentioned in this last line, you would be actually dealing with licensed, fiduciary-duty financial professional......just like you were led to believe when you bumped into your fake Corporate salesperson who said...."trust me, I am an advisor..."

Common names for investment advisers include asset managers, investment counsellors, investment managers, portfolio managers, and wealth managers”

http://www.finra.org/investors/investme ... p5cJ3.dpuf

[admin]

"Dealing Representative means "I represent the Dealer not you”

http://www.securities-administrators.ca/uploadedFiles/General/pdfs/UnderstandingRegistration_EN.pdf

……And the image found below is an expanded and highlighted peek at the same page, showing the two most important/common registration categories for investment people in Canada.

The “fraud” if you will allow me to use that word, is when persons who are legally registered in the category of a “Dealing Representative” (of which there are approx 150,000 in Canada) DECEIVE their clients by referring to themselves as an “advisor”, without holding the registration (or legal duty) of an Advising Representative.

An Advising rep is required to provide a fiduciary duty to clients, and as the name implies, to give advice. A “dealing rep” is a mere salesperson, without a fiduciary duty, and only “borrowing” (illegally if you read sec 34 of BC Sec Act) the title to give a false impression to the customer…….

To search for your "advisor" registration (in Canada) visit the Canadian Securities Administrators (CSA) web site. The CSA is the national "umbrella" organization for 13 provincial and territorial securities commissions and they maintain the registration database. I must point out however that the CSA, as an entity fully funded by fees from the securities industry, has demonstrated a good deal of regulatory "capture". They have forgotten in some cases that a good part of their mandate and their marketing is that the "Protect Investors". As you will see when you get to this search page, they make it "easy" for investors to determine IF their representative is registered.....and most will stop there.....and be duped. They do NOT make it at all easy to determine WHAT category their rep is registered in. They in fact have made it about three or four clicks harder to find, in January 2016, in what some feel might be a reaction to bloggers like this pointing the public in the direction of how to search for their "advisor".

http://www.securities-administrators.ca/nrs/nrsearchprep.aspx?ID=1325 (CSA advisor search page)


So, worth repeating for clarity: The typical (99%) bank or investment dealer (even life insurance and mutual fund sellers) CALL themselves an Advisor, to lure the public into a false sense of security, trust and vulnerablity with their money……..and once the salesperson HAS their money, they do NOT have to provide them with the protection implied by the term “advisor” (or adviser, or advisoir’….:). They can then legally treat them to the lower standard of care, that of a salesperson, and even profit at “expense or harm” to the client…….

"Dealing Representative means "I represent the Dealer not you”

Advising Rep means I must fall under legal fiduciary guidelines with a duty of care and “sole loyalty” to the client….

[admin]

The simplest deception......and how it works to cut your retirement security......by half or more…a "bait and switch" story about true life.

Step One:

Use every advertising means available to convince investors that large brokerage firms and investment dealers have licensed and regulated Investment "Advisors", and that they are there to protect and guide the customer.

Step Two: After using the above "bait" to lure trusting and vulnerable investors and their money, cleverly "switch" the "advice givers" over to commission brokers or salespeople, instead of the fiduciary professionals that step one promised.

Step Three: Use "self" regulators fully paid by the industry, to help conceal this deception.

Step Four: Sell higher revenue generating products, lower quality products and less suitable, less beneficial investment products to the trusting customers. This step may add an additional 2% to the overall cost of the customer's investments.

Step Five: 2% in higher cost (or lesser performance) will cut the average persons retirement by HALF over a lifetime of investing. Google it.

Step Six: The other half of your life's work will be in the pockets of the faked "advisor" and his company.

Solution:

Search your "advisor's" exact license and registration category here for US investors:
http://brokercheck.finra.org

If they turn out to be registered as a "broker" and not an "adviser/advisor" you are being baited with a mere title for which no license exists. You are now at about step 3..... in the chain of deception. This is fraud.

In Canada, search your "advisor's" registration here: http://www.securities-administrators.ca ... px?ID=1325

If their registration says "adviser" or "advising representative"spelled with an "ER" at the end then you have a truly licensed fiduciary professional.

If it says "dealing representative" you have a commission or fee based salesperson who is not bound by any legal fiduciary duty to protect you, or be solely loyal to your interests. You are then at step 3......in the chain of deception. Again, fraud.

See a class action lawyer and let them fight on your behalf to get your money back from this everyday, every-dealer scam.

[admin]

If your Investment "Advisor" also calls himself a "Vice President" of the firm, you should probably run……or sue for TWO intentional deceptions, and get your money back. Here is a bit of interesting reading about the "vice president" deception at your local brokerage sales company.

"To Deceive is to Defraud….."

(C) MISLEADING TITLES

¶ 263

The defendant attributed to Migirdic fake titles, i.e. "vice-president" and "vice-president and director", in addition to letting him use the title "specialist in retirement investments". Those titles were false representations that misled the plaintiffs, hid reality from them, disinformed them,

comforted them in their confidence in Migirdic, reduced their distrust, and contributed to Migirdic's fraud. The defendant committed a fault in terms of its obligation to inform and advise, in addition to misleading the plaintiffs.

¶ 264 In principle, a vice-president is a person in a management position in a firm. The vice-president is immediately below the president and reports to the president. The vice-president acts in the absence of the president. It is a prestigious title in a firm, a title held by few individuals. The English word "director", the incorrect origin of the word used here in French, designates either the member of a board of directors of a firm or the head of a department or office. That is also a prestigious title, at least when it is attributed in a prestigious firm.

¶ 265

In the defendant's operations, these titles also have that meaning, but not that meaning alone! They are given as well to any representative (also called an "investment advisor" or previously a "financial consultant") who reaches a certain level of commissions in a given year, in short, who "sells" a lot and brings in a lot of commissions.

A person is awarded the title essentially in "recognition" of work and as a marketing tool, as the president of CIBC Wood Gundy, Tom Monahan, acknowledged. However, to have the title of "vice-president" or "vice-president and director" adds no new responsibility or any management role. What is more, it testifies to neither greater competence nor more reliability.

¶ 266 In the defendant's operations, the titles are, in fact attributed to many people. In 1995, there were 206 vice-presidents and 44 vice-presidents and directors out of 556 representatives. In 1997, there were 217 vice-presidents and 109 vice-presidents and directors out of 612 representatives. In 1999, there were 197 vice-presidents and 101 vice-presidents and directors out of 725 representatives, the proportions were about the same in 2000. That year,

about 300 of the 700 representatives had a title!

¶ 267

The problem is that clients do not know that these titles are simply marketing tools

, i.e. a means to convince them that they have an excellent representative,

and recognition for the volume of commissions.

Clients therefore believe they have a "very special" and "eminently acknowledged" representative when the representative has the title of "vice-president" or "vice-president and director". That was what Mr. Markarian in fact believed, as he testified. Richard Papazian, another witness (and also a victim) thought the same thing. So the titles create a false feeling of trust, comfort and prestige, the role of which is not trivial in the commission of fraud.

¶ 268 The plaintiffs were the victims of these false representations by the defendant in their regard.

¶ 269 Migirdic received the title of vice-president in 1986, then vice-president and director in the early 1990s. He retained the titles until he left, because of the enormous volume of commissions he generated. In fact, the titles increased Mr. Markarian's trust in Migirdic and prompted him to guard against him and his actions even less. The defendant committed a fault in acting to ensure that.

¶ 270 The Court wholly subscribes to the comments of Mr. Justice Donald Gordon in Blackburn v. Midland Walwyn Capital inc. [See Note 19 below], a decision of the Ontario Superior Court of Justice:

Note 19: [2003] O.J. 621 (O.S.C.J.).

[121] Promoting George Georgiou to

the position of vice-president was purely a marketing gimmick, an intentional misrepresentation to the public

by Midland. The public would consider a vice-president to have special status, be more knowledgeable and influential.

[123] What is more problematic is the process. The promotion resulted from the influence of the National Sales Manager. This clearly demonstrates the high position sales had in the corporate structure and, conversely, the lack of importance allocated to compliance.

[124] Clients of the firm, including the Blackburns, would be impressed with this announcement. Any misgivings they may have had about George Georgiou's ethics on trading practices evaporated with the recognition by head office of a superior strockbroker.

[126] Midland's conduct in this escapade is further evidence of their negligence, of the importance of revenue over client objectives and satisfaction and their willful blindness to the protection of their clients. Such a practice is contrary to the regulatory standards of integrity, dignity an ethical conduct.

[Emphasis added.] [sic]

¶ 271 That decision was upheld by the Court of Appeal for Ontario [See Note 20 below], and the Supreme Court refused leave to appeal.

Note 20: [2005] O.J. 768 (O.C.A.).

¶ 272 In the Court's opinion, the titles "vice-president" and "vice-president and director" have no place in the brokerage field when they apply to simple representatives. They then constitute a mere "marketing gimmick", to use Gordon J.'s words, just a misrepresentation contrary to the duty of a brokerage firm to seek to protect its clients and to inform them well. By continuing to use those titles, brokerage firms expose themselves to criticism, as in this case.

¶ 273 As for the title "specialist in retirement investments" or "retirement specialist", it was not a title given Migirdic by the defendant, but the defendant authorized him to use it (among others on his business cards). Once again, it was a way to instill trust in retirees and prompt them to rely on their representative in all confidence. In actuality, the title meant nothing more than that Migirdic had many retired clients, which did not make him more competent in that area and also did not make him a better representative for those people (much to the contrary, Migirdic exploited their greater vulnerability).

the entire Judgement can be read here:

http://investorvoice.ca/Cases/Investor/ ... etsInc.htm

[admin]

I just love how easy (and criminally free) investment dealers and self-regulators can get away with the financial rape of investors, BY faked financial professionals…….see below quote from IIROC, investment industry "self" regulators in Canada:

"*Use of the word Advisor – what this means:In this investor brochure, we have used the general term “advisor” to refer to a number of official regulatory approval categories such as Registered Representative and Investment Representative. Please note that “advisor” is not an official IIROC approval category for individuals working at IIROC-regulated firms. ”Advisor” is also not being used in this brochure to represent an official registration category."

(This comment is found on page one of this brochure from IIROC….I expect it to be deleted from use as soon as this information is noticed…..oops!) http://www.iiroc.ca/Documents/WhyMatterBrochure_en.pdf (fake "advisors" cost you double and cut your retirement in half…..but "they are richer than you think"…:)

The document that this quote comes from is found online here at IIROC http://www.iiroc.ca/Documents/WhyMatterBrochure_en.pdf

and when it is removed shortly (too candid, too revealing……too honest:) by IIROC it can also be found at the link below

https://drive.google.com/file/d/0BzE_LM ... sp=sharing

Take information such as this to any reputable classaction law firm if you wish to begin the process of getting your money back from professional fraud.

click to enlarge this window

From a standpoint of trust, integrity, fiduciary duty, actual license and/or registration YOUR INVESTMENT "ADVISOR" is a FAKED TITLE….

Keep reading this post and you will soon run across the license/registration search engines for Canada and the US to confirm that your "advisor" is not licensed as an "advisor". #classaction #fraudulentmisrepresentation

[admin]

Class action potential against Investment Dealers and grossly negligent/complicit regulators:

“It's easier to fool people than to convince them that they have been fooled.”

Mark Twain

I suggest that for 99% of investors, your investment dealer and "advisor" are utilizing a fake title…..without holding or meeting the particular license they imply?

Larry Elford, former CFP, CIM, FCSI, Associate Portfolio Manager

Most investors have no idea that there are TWO vastly DIFFERENT standards for those who recommend investments.  (as different as the standard for a "Doctor" and a "Docter") (One standard requires them to seek and sell only the "best" investments for the client, and the more commonly applied standard is to seek and sell investments which THEY deem to be "suitable") Would you eat at a restaurant where the highest standards met were that they deem the food "suitable"?

#1  Today, your  investment "advisor" can be a "faked title" and nothing more, while they pretend to you that they have got your back covered. (Canadian Securities Administrators data)

#2  This is THE most common practice among the 150,000 persons in Canada who refer to themselves as "advisors",  about one million in the US, and among our most trusted banks and investment firms. (Canadian Securities Administrators data and FINRA in US)

#3  This deception, allows financial sales-agents to hide the best products and advice, while making billions selling second or third-rate products and tainted-advice. (sub-prime mortgage investments, Deferred Sales Charge funds, house-brand funds, law-exempt, and other defective or substandard products) 

#4  This gives banks and broker/dealers the opportunity to pickpocket billions, out of the retirement security of everyday investors, into the pockets of bankers and fake financial advisors.

#5  This is against the law, against fair and honest practices, and against the Securities Acts of every Province I have studied. Sadly the regulators allow it for money and other "future considerations".

#6 This happens in the same manner that other abuses happen by the most powerful. Whether a Bernie Madoff, or a Bill Cosby…..some people or institutions are simply "too highly revered" to prosecute.  They stand above the reach of our laws, even while they fall within the jurisdiction of our laws.

In Canada, the Prime Minister Stephen Harper allows this, aids this, and in fact gave banks and investment sellers a FREE EXEMPTION from his "tough on white collar crime bill" (they deleted the portion of the bill that included jail time for "public markets" fraud)
1 min video at YouTube titled "
Harper Free-Crime Bank Ride   https://youtu.be/Toem8yC0Fx4

In the US, the #SEC also fails to protect Americans financial health, and fails to warn them of the two standards. (one of which is most dangerous to investors) https://youtu.be/aX52f3Jjbm8

I feel that this must change, or all Canadians (and Americans) suffer. Our economies fail, retirements fail, society loses.
Larry Elford lelford@shaw.ca

[admin]

Aug 20th, 2015

Attention News Editor,

For Immediate release:

Investment industry whistleblower reveals how professional deception is harming North American investors. Alleges industry-regulator connections that allow client abuse.

Lethbridge, Alberta, Aug 20th, 2015

Larry Elford, former investment broker and 20 year industry insider, is on a mission to protect investors from industry-insider tricks designed to harm their retirement investments.

Up to half of investor’s future retirement savings can be diverted by one’s “advisor”, to the advisor and their sponsoring dealer, with just 2% shortchanged from investment returns each year, over a lifetime of investing.

Research provided freely to the public at InvestorAdvocates.ca shows how this is done without the knowledge or informed consent of many investors. Beginning with a simple (yet cleverly hidden) fact that approximately 150,000 “advisors” in Canada, and 600,000 in the USA, do not carry the license or the duty of care to the client that they advertise and imply.

“Advisors”, dealers and regulators can thus often be found to be working too-closely together, whilst public interest protections are sometimes forgotten.

“Deception of the consumer goes contrary to rules, codes and policies of the investment industry, yet the industry seems able to get away with completely policing itself. The criminal code is rarely, if ever applied, even when it is violated. We are talking about an industry which has elevated itself to be above the law”. Larry Elford


This news release contains 8 pages:

Page 1 News Release


Page 2-3 Supporting article about testimony to US Congress last week, describing the issue well.


Pages 4-6 “To Deceive is to Defraud”
7 Steps "Advisors" Take To Abuse Unsuspecting Investors
A free-use article, with links to government registration sites in Canada and the USA to check your broker/”advisor’s” license or registration.


Page 7 A 585 word article, written by industry-expert Larry Elford which you have permission from InvestorAdvocates.ca to print without cost, if you feel that this information is newsworthy and in the interest of your readers.


Page 8 Contact info
http://www.benefitspro.com/2015/08/14/w ... page_all=1

HEADLINE “Witness says brokers try to pass themselves off as fiduciaries”
Testimony details retiree horror stories during hearings on DOL fiduciary rule
AUG 14, 2015 | BY NICK THORNTON



At the heart of the Department of Labor’s effort to finalize a new rule requiring advisors to act as fiduciaries to most 401(k) plans and IRAs is the need to clarify which entities in the financial services world are actual fiduciaries, and which merely imply that they are.
That line has been blurred, argued Labor Secretary Thomas Perez, in testimony to Congress defending the Department’s effort to post a rule by the end of the Obama Administration, in spite of wide-ranging criticism from stakeholders, and a growing number of lawmakers, that the rule, as proposed, would have massive unintentional consequences for small workplace retirement accounts and IRAs.
One witness at this week’s public open meeting over the DOL’s proposal testified to the extent of how blurry the line between fiduciary and broker has become.


In his capacity as head of the Public Investors Arbitration Bar Association, a nonprofit association of attorneys that represents plaintiffs in securities arbitration hearings, Joseph Peiffer testified that brokerage firms routinely advertise themselves as fiduciaries when they clearly are not.

“One thing is clear,” Peiffer told a panel of DOL representatives. “Right now, the very same brokerage firms that advertise like fiduciaries routinely contest that they owe a fiduciary duty to their clients.”
In some of the most personal testimony offered in the four days of hearings at the DOL, Peiffer detailed several horror stories in his time representing more than 500 clients that he says were victims of conflicted advice.
“Almost every week, we see a retiree come into our office who has lost a substantial amount of his life savings,” said Peiffer.
“These retirees often break down in my office when I explain to them how their investment was lost to conflicted advice.  I have had clients that ran out of money and had to rent a room from his ex-wife. I have had clients live with me because they couldn't afford the gas and lodging to stay at a protracted arbitration hearing.  I have, unfortunately, even had clients attempt suicide,” he added.
Along with his testimony, Peiffer submitted a report he coauthored this year that compares the advertising claims with the arbitration stances made by nine of the country’s largest broker-dealer brands.
“Brokerage firms now engage in advertising that is clearly calculated to leave the false impression with investors that stockbrokers take the same fiduciary care as a doctor or a lawyer,” claims the report, which was co-authored by Christine Lazaro, director of the St. John’s School of Law securities arbitration clinic.
“But, while brokerage firms advertise as though they are trusted guardians of their clients’ best interests, they arbitrate any resulting disputes as though they are used car salesmen,” wrote the attorneys.
Their report claimed that Merrill Lynch, Fidelity Investments, Ameriprise, Wells Fargo, Morgan Stanley, Allstate Financial, UBS, Berthel Fisher, and Charles Schwab all advertise “in a fashion that is designed to lull investors into the belief that they are being offered the services of a fiduciary.”
Language in one piece of Fidelity marketing material actually claims the firm puts clients’ interests before their own, according to the study.

Allstate, a brand known for its “you’re in good hands” slogan, which the paper suggests is enough to dupe investors into thinking the firm has a legal obligation to put investors’ interests first, is currently fighting an arbitration claim brought by a couple who lost $400,000 because the broker put all of their savings in a non-diversified stock portfolio in 2007.
Allstate’s defense? It owed no fiduciary duty to the couple. The case is pending, according to the report.

One UBS ad features a voice presenting for a hypothetical broker saying she will not rest until her client “knows she comes first,” alleges the paper.
But when it is forced to defend its action in arbitration hearings, the firm routinely deploys the defense that brokers don’t owe fiduciary duties to their customers, says the report.
Merrill Lynch’s website claims to offer investors a financial strategy that “puts your needs and priorities front and center,” the report says.

Yet the firm, one of the first brokers to go on the public record in favor of a uniform fiduciary standard, “has refused to acknowledge it owes a fiduciary duty in arbitration when it breaches that duty to investors,” write Peiffer and Lazaro.
“Billions each year slip through the fingers of American investors because of the conflicted investment advice they receive,” they conclude.
“The SEC and DOL must take action to force brokerage firms to live up to the standard that they market to investors rather than the one brokerage firms argue when they have wronged those same investors.”









Re: Advisor Disguise/Deception
by admin » Tue Jul 28, 2015 7:46 pm
This article comes from a forum posing in http://www.investorAdvocates.ca under the date and topic shown directly above.


click to enlarge this image of the US broker registration search page (web link found at bottom of this page)

The most important class action potential on the horizon today.
Commonly repeated forms of deception and intentional-misdirection, leads investment clients into situations of being financial abused BY so-called financial "advisors" and their sponsoring dealers

It is my belief that the commonality of the methods used to deceive/trick the public, combined with the well documented methods to unjustly enrich the broker/dealer, makes a case for class actions an easier obstacle to overcome than were the tobacco lawsuits of recent history….

Why?

Because billions of dollars are being cheated, shortchanged and siphoned away from trusting North American investors, into the hands of slick investment dealers and their "faked advisor" sales-force. videos at https://www.youtube.com/user/investorad ... ature=mhee


How?

7 Steps "Advisors" Take To Abuse Unsuspecting Investors

1. Conceal true license from firm customers… (use non-regulated "titles" to imply something to clients other than what license/registration says)

2. To help conceal the legal duty (or lack of) from customers…(hide from them the difference between fiduciary (professional) duty and "suitability" (salesperson) duty

3. Misdirect customers into a false assumption that they have a professional with a valued duty of care to the client (the industry thus actually "helps" the trusting customer to be fooled by industry misdirection)

4. Hide the best advice, and best products from customers…profit from the greater rewards of selling substandard or higher-fee investments. (house brand funds, higher fee products)

5. Conceal conflicts of interest from client. (fees, commissions, deferred sales charges, dealer financial relationships/incentives)

6. Conceal the lack of agency duty/sole loyalty to client. (strongly imply professional levels of integrity and trust while delivering “self-regulating” salespersons. Misdirection and deception, to shortchange clients.)

7. Conceal from clients the difference between a SEC or Canadian registered "adviser" (fiduciary professional) and a self-titled, non-regulated "advisor" (salesperson/broker).

Who?

Virtually anyone referring to themselves as an "advisor". The correct legal license under US and Canadian Securities Acts is spelled "adviser", and Canadian regulators have confirmed that "advisor" spelled using "OR" is not of concern or oversight to them….(those who use it are thus free to use it in any way they choose, to deceive, and to misdirect consumers with it).



click to enlarge this image of the Canadian broker registration search page, (web link found at bottom of this page)

Keep reading the posts that follow in this forum topic if you would like to see more of the problem, and some solutions to protect your financial health from professional predation. Contact the author at visualinvestigations@shaw.ca if you are a victim of this type of deceptive practices by a financial professional. Class actions are being contemplated to bring accountability to an industry which promises "integrity and trust in every transaction they are involved in…."

The most important links which lend credibility to these arguments above is to simply go to either the BrokerCheck site with FINRA in the USA, or if in Canada, to the Canadian Securities Administrators registration search page:

http://brokercheck.finra.org Type in the name of your "advisor" here and find out that they are 9 times out of 10 registered as a "broker". (with a vastly different legal obligation to their client than is implied)

http://www.securities-administrators.ca ... px?ID=1325 Nine out of ten "advisors" in Canada are hiding their true "dealing representative" registration.

Above article and images found at this link viewtopic.php?f=1&t=193&sid=4815c9cc9e0caaedccd4b376cfabdd36#p3847


To Deceive is to Defraud, 590 word article, free to use, edit as needed.

Larry Elford, of Lethbridge Alberta recently visited this paper with a story of financial trickery, and surprisingly, the trickery is not caused by scam artists or ponzi schemers. He describes a story of financial abuse by financial professionals.

Elford worked twenty years inside Canada’s largest brokerage firms, and left after suffering pressure to remain silent about industry misdirection and deception, that he stated was endemic within the industry.

He is not the only person speaking out. President Obama recently spoke to the AARP (American Association For Retired Persons) about the cost of such abuses to the American public, saying that White House studies put the harm to Americans at $17 billion per year. 3 min video here https://youtu.be/suNJh2uO18g

Elford describes it as being worse in Canada, where University of Toronto pension studies suggest the harm to Canadians could be one billion dollars each week, simply from mutual fund products alone. He cites and refers to the sources of this information at InvestorAdvocates.ca.

“I have been treated with the utmost respect and trust by my investment clients, and I owe no less to them in return. As a result of my opinion being opposed by some in the investment industry, I have decided to dedicate myself to informing the public of the ways they can be fooled by investment “advisors”. Elford

Elford also points to testimony in US Congress, where witnesses said that investment firms often promised trusted financial professionals, (fiduciaries, to use a centuries-old legal term) someone who has a “sole loyalty” to serve the client’s best interests...and then who all too often avoid delivering this highest level of duty, making huge gains for themselves by taking this shortcut,...the shortcut of deceiving clients with a promised professional, while delivering a commission hungry salesperson.

Elford claims it is equivalent to going to a Doctor for professional advice and treatment, only to find that there is now a new class of “doctor” who have dropped the “do no harm” oath...and done so while hiding this important fact from patients. His comments appear to be supported by those made to Congress. The article he refers to is also found at InvestorAdvocates.ca under the topic of “Advisor Disguise/Deception”.

A link is provided to allow investors to search the registration category of their broker/”advisor”. Elford says that there are nearly 3/4 million salespersons, or brokers in North America, who do not carry the fiduciary duty (the professional “do no harm” type of duty). This group typically calls themselves “advisors”, (note spelling of “advisor”) and advertises and markets themselves with the strong implication that they have duties of loyalty of a doctor or a lawyer. “Do not be fooled by nine out of ten advisors, who are hiding their most important secrets from the customer”. Elford provides a link to the 7 things a typical (non-fiduciary advisor) will hide from a customer. “In my opinion, these are definitive warning signs of a financial relationship based on deception and misdirection”

Elford is a former CFP, CIM, FCSI, Associate Portfolio Manager, and dedicates his time to “fighting for fairness” in an industry where the clients are told that fairness comes with the package,...if only that were so”.

This article, the articles etc, are posted at http://www.investoradvocates.ca on Aug 17th, 2015 under the forum topic titled Advisor Disguise/Deception

Elford Contact info

Phone 403 393-4742 for media questions

Email: VisualInvestigations@shaw.ca



Larry Elford, former CFP, CIM, FCSI, Associate Portfolio Manager

Current  http://www.investment-bodyguard.com

Twitter:    @RecoveredBroker

lelford@shaw.ca

Facebook group for Fraud victims 

https://www.facebook.com/groups/albertafraud/

Facebook group for Fraud victims across Canada (Small Investors Protection Association of Canada, 1998)

https://www.facebook.com/groups/240100382792373/

Video site for victims of investment malpractice    

http://www.youtube.com/user/investoradv ... ature=mhee

http://www.albertainvestorsprotection.com

http://www.investoradvocates.ca

[admin]

"TO DECEIVE IS TO DEFRAUD"

Witness says brokers try to pass themselves off as fiduciaries
AUG 14, 2015 | BY NICK THORNTON

At the heart of the Department of Labor’s effort to finalize a new rule requiring advisors to act as fiduciaries to most 401(k) plans and IRAs is the need to clarify which entities in the financial services world are actual fiduciaries, and which merely imply that they are.

That line has been blurred, argued Labor Secretary Thomas Perez, in testimony to Congress defending the Department’s effort to post a rule by the end of the Obama Administration, in spite of wide-ranging criticism from stakeholders, and a growing number of lawmakers, that the rule, as proposed, would have massive unintentional consequences for small workplace retirement accounts and IRAs.

One witness at this week’s public open meeting over the DOL’s proposal testified to the extent of how blurry the line between fiduciary and broker has become.

In his capacity as head of the Public Investors Arbitration Bar Association, a nonprofit association of attorneys that represents plaintiffs in securities arbitration hearings, Joseph Peiffer testified that brokerage firms routinely advertise themselves as fiduciaries when they clearly are not.

RELATED


DOL fiduciary rule puts broker-dealers in Catch-22

Brokers are not now advisors, nor can they legally put themselves out as advisors, so how can the DOL’s fiduciary...

“One thing is clear,” Peiffer told a panel of DOL representatives. “Right now, the very same brokerage firms that advertise like fiduciaries routinely contest that they owe a fiduciary duty to their clients.”

In some of the most personal testimony offered in the four days of hearings at the DOL, Peiffer detailed several horror stories in his time representing more than 500 clients that he says were victims of conflicted advice.

“Almost every week, we see a retiree come into our office who has lost a substantial amount of his life savings,”

said Peiffer.

“These retirees often break down in my office when I explain to them how their investment was lost to conflicted advice. I have had clients that ran out of money and had to rent a room from his ex-wife. I have had clients live with me because they couldn't afford the gas and lodging to stay at a protracted arbitration hearing. I have, unfortunately, even had clients attempt suicide,” he added.

Along with his testimony, Peiffer submitted a report he coauthored this year that compares the advertising claims with the arbitration stances made by nine of the country’s largest broker-dealer brands.

“Brokerage firms now engage in advertising that is clearly calculated to leave the false impression with investors that stockbrokers take the same fiduciary care as a doctor or a lawyer,”

claims the report, which was co-authored by Christine Lazaro, director of the St. John’s School of Law securities arbitration clinic.

“But, while brokerage firms advertise as though they are trusted guardians of their clients’ best interests, they arbitrate any resulting disputes as though they are used car salesmen,”

wrote the attorneys.

Their report claimed that

Merrill Lynch, Fidelity Investments, Ameriprise, Wells Fargo, Morgan Stanley, Allstate Financial, UBS, Berthel Fisher, and Charles Schwab all advertise “in a fashion that is designed to lull investors into the belief that they are being offered the services of a fiduciary.”

Language in one piece of Fidelity marketing material actually claims the firm puts clients’ interests before their own,

according to the study.

Allstate, a brand known for its “you’re in good hands” slogan, which the paper suggests is enough to dupe investors into thinking the firm has a legal obligation to put investors’ interests first, is currently fighting an arbitration claim brought by a couple who lost $400,000 because the broker put all of their savings in a non-diversified stock portfolio in 2007.

Allstate’s defense? It owed no fiduciary duty to the couple. The case is pending, according to the report.

One UBS ad features a voice presenting for a hypothetical broker saying she will not rest until her client “knows she comes first,”

alleges the paper.

But when it is forced to defend its action in arbitration hearings, the firm routinely deploys the defense that brokers don’t owe fiduciary duties to their customers, says the report.

Merrill Lynch’s website claims to offer investors a financial strategy that “puts your needs and priorities front and center,”

the report says.

Yet

the firm, one of the first brokers to go on the public record in favor of a uniform fiduciary standard, “has refused to acknowledge it owes a fiduciary duty in arbitration when it breaches that duty to investors,”

write Peiffer and Lazaro.

“Billions each year slip through the fingers of American investors because of the conflicted investment advice they receive,”

they conclude.

“The SEC and DOL must take action to force brokerage firms to live up to the standard that they market to investors rather than the one brokerage firms argue when they have wronged those same investors.”

Read more on the proposed DOL fiduciary rule HERE.
http://www.benefitspro.com/2015/08/14/witness-says-brokers-try-to-pass-themselves-off-as?page_all=1

larry elford
visualinvestigations@shaw.ca



Getting affordable, professional help with financial protection from predators http://www.investment-bodyguard.com

Twitter page using social media for social good: @RecoveredBroker

Facebook group for Fraud victims across Canada and the US. JOIN ME HERE if you wish to share and find common solutions: https://www.facebook.com/groups/albertafraud/

Facebook group for Small Investor Protection Association (Canada) also of value to US investors. Again, using social media for social good.
https://www.facebook.com/groups/240100382792373/

web site about the risk of your Securities Commission selling out your public protective laws, acting in breach of the public trust http://www.albertafraud.com

Video site for victims information http://www.youtube.com/user/investoradv ... ature=mhee

Web site for exempt markets products victims http://www.albertainvestorsprotection.com

GET YOUR MONEY BACK FLOGG (forum/blog) Original site since 2004 http://www.investoradvocates.ca
Tricks of the trade, solutions, self defence and self help research. Free and free of any advertising.

Historical data site for investment industry and self regulation research and behaviours back to the 1990's http://www.investorvoice.ca

[admin]

click to enlarge this image of the US broker registration search page (web link found at bottom of this page)

The most important class action potential on the horizon today.
Commonly repeated forms of deception and intentional-misdirection, leads investment clients into situations of being financial abused BY so-called financial "advisors" and their sponsoring dealers

It is my belief that the commonality of the methods used to deceive/trick the public, combined with the well documented methods to unjustly enrich the broker/dealer, makes showing a case for very large class actions an easier obstacle to overcome than were the tobacco lawsuits of recent history….

Why?

Because billions of dollars are being cheated, shortchanged and siphoned away from trusting North American investors, into the hands of slick investment dealers and their "faked advisor" sales-force. videos at https://www.youtube.com/user/investoradvocate?feature=mhee

How?

7 Steps "Advisors" Take To Abuse Unsuspecting Investors

1. Conceal true license from firm customers… (use non-regulated "titles" to imply something to clients other than what license/registration says)

2. To help conceal legal duty from customers…(hide from them the difference between fiduciary (professional) duty and "suitability" (salesperson) duty)

3. Misdirect customers into a false assumption that they have a professional with a valued duty of care to them (the industry thus actually "helps" the trusting customer to "fool themselves" with industry misdirection)

4. Hide best-advice, and best-products from customers…profit from the greater rewards of selling substandard or higher-fee investments. (house brand funds, high fee products)

5. Conceal conflicts of interest from client. (fees, commissions, deferred sales charges, dealer financial relationships/incentives)

6. Conceal the lack of agency duty/sole loyalty to client. (strongly imply integrity and trust while delivery of salespersons. Misdirection, deception, shortchange clients.)

7. Conceal from clients the difference between a SEC or Canadian registered "adviser" (fiduciary professional) and a self-titled, non-regulated "advisor". (salesperson/broker)

Who?

Virtually anyone referring to themselves as an "advisor" (the correct legal license under US and Canadian Securities Acts is spelled "adviser", and Canadian regulators have confirmed that "advisor" spelled "OR" is not of concern or oversight to them at all….those who use it are free to deceive, or use it to misdirect consumers with it)

Four out of five employed by larger investment dealers are found to be taking advantage of the public in some or all of the manners numbered above.

click to enlarge this image of the Canadian broker registration search page, (web link found at bottom of this page)

Keep reading the posts that follow in this topic if you would like to see more of the problem, and some solutions/things you can do to protect your financial health from professional predation. Contact the author at visualinvestigations@shaw.ca if you are a victim of this type of deceptive/fraudulent practices by a financial professional. Class actions are being contemplated to bring accountability to an industry which promises "integrity and trust in every transaction they are involved in…."

The most important link or two which lends credibility to these arguments above is to simply go to either the BrokerCheck site with FINRA in the USA, or if in Canada, to the Canadian Securities Administrators registration search page:

http://brokercheck.finra.org Type in the name of your "advisor" here and find out that they are 9 times out of 10 truly registered as a "broker". (with a vastly different legal obligation to their client than they imply)

http://www.securities-administrators.ca%20...%20px?ID=1325 Nine out of ten "advisors" in Canada are hiding their true "dealing representative" registration. ("Dealing Representative" is described as a mere "salesperson" by the CSA)

7 minute tour of SEC Regulations of Investment Advisers, the bad news, the disguises and deceptions that it allows for most investors to suffer from, and the economic harm to Americans. There are two sets of rules, one protects you from financial predators, and sadly, this one allows financial predators to abuse more than 90% of Americans. Lives harmed, retirement dreams shattered. Some of the special tricks hidden from the public. Tell me @RecoveredBroker if I miss anything or need to correct, and tell your rep in Washington that the SEC owes you your retirement back.
https://youtu.be/aX52f3Jjbm8