There are many fine securities salespeople. I don't want to say much about them because they don't teach any lessons. On the other hand, we know that the financial services industry employs more scoundrels than are strictly necessary. And because you never know when you are going to encounter one, it's worthwhile talking briefly about the bad apples. Knowing about the miscreants can protect your wealth.
Because I never have had a problem with a bad salesperson, I am going to tell you the experiences of someone who did—my father.
My father Bert Jacobs was an astute, very successful businessman, but a horrible investor. He could never get it through his head that the investment business worked differently than the clothing business he knew so well.
When a clothing manufacturer's rep came in his store and said, “Bert, I have a deal for you,” it was a deal, because all the salesmen knew my father was a real pro. They knew that they had no chance of putting anything over on him. Also, he was a consummate salesman who loved other salesmen. He really felt at home with them.
Unfortunately, this made him a sucker for stockbrokers. He never understood that some stockbrokers always had a deal. No matter how treacherous the market or inferior the merchandise, there was always a broker willing to sell him something. If he liked the broker enough, he bought. He seldom understood the investment merits.
Once he was sold some very high yielding ...