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Former Brokers Say JP Morgan Favored Selling Bank's Own Funds Over Others
Edward D. Jones & Co. received $82.4 million in secret payments from seven mutual-fund firms in the first 11 months of 2004, through a lopsided fee structure that in some cases gave the brokerage firm more compensation for selling poorly performing funds than for selling stellar performers.
Some of the worst-performing fund families offered Jones the richest incentives to sell their products.
Reply to @Sven: These so-called "financial advisors" are not held to the fiduciary standard and firms have been battling against the imposition of fiduciary standard for so long.
They are really brokers despite their various titles and the only requirement is that the investment is suitable at the time they are sold and suitability standard is much loosely defined. They might also be fiduciary but not to the client but to the firm.
What I don't know is why this is news. "It is not cheating if you are not caught" is the mantra most people live by. So any investment bank which is selling OTHER company funds over others does not exist. They just haven't been caught yet.
It is high time we all woke up and eschewed big investment banks and look to boutique fund shops. Of course, if you are luck is as good as mine, you will find Marketfield only to learn it will get sold to NY Life. Oh well, there's always FPA Cresent...
Comments
Same manure, different day.
Edward D. Jones & Co. received $82.4 million in secret payments from seven mutual-fund firms in the first 11 months of 2004, through a lopsided fee structure that in some cases gave the brokerage firm more compensation for selling poorly performing funds than for selling stellar performers.
Some of the worst-performing fund families offered Jones the richest incentives to sell their products.
http://online.wsj.com/article/0,,SB110565044387025581,00.html
Where are the customer's yachts.
http://www.tvacres.com/images/ads_tydbol_man.jpg
They are really brokers despite their various titles and the only requirement is that the investment is suitable at the time they are sold and suitability standard is much loosely defined. They might also be fiduciary but not to the client but to the firm.
"This will not change until a fiduciary standard is assigned to every relationship between retail advisor and retail client in the United States."
http://www.thereformedbroker.com/2012/07/03/i-want-you-to-picture-a-furnace/
More flushed manure.
http://en.wikipedia.org/wiki/2003_mutual_fund_scandal
It is high time we all woke up and eschewed big investment banks and look to boutique fund shops. Of course, if you are luck is as good as mine, you will find Marketfield only to learn it will get sold to NY Life. Oh well, there's always FPA Cresent...