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Get Wise to Your Advisor: How to Reach Your Investment Goals Without Getting Ripped Off by Steven D. Lockshin

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Preface

As I write these words, a battle is playing out in Washington, DC. This David-versus-Goliath contest pits investors against the investment brokerage industry—and it’s not looking good for investors.

In the wake of the 2008 market crash and the ensuing financial crisis, lawmakers directed the Securities and Exchange Commission—Wall Street’s cop—to hold stock and insurance brokers to a tough investor protection standard. The brokerage and insurance industries went ballistic, launching an all-out effort to delay, water down, and otherwise smother the coming standard before it could breathe a breath of mature life.

How exactly would this frightful new standard impact Wall Street? It would force brokers to put clients’ interests first and it would likely make them liable if they profited unjustly at the cost of the average investor. That might seem like a good, commonsense idea to you and me. But Wall Street thinks very, very differently.

I want to be clear that many Wall Street brokers are truly concerned with doing the right thing for their clients. But as you’ll learn, even the good guys operate in an industry so riddled with conflicts of interest that the temptation to put profits before people exerts a powerful and constant pull. This tainted environment is enabled by the regulatory standard that the industry is fighting tooth and nail to protect, a mushy standard that allows brokers a ton of, to put it politely, ethical wiggle room. Replacing that standard, the industry ...

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