Monday, June 15, 2009

Reasons to Fire Your Stockbroker

Your stock broker is not a fiduciary. Their best interests are not your best interests. They are employees of brokerage firms who work for the benefit of their brokerage firm, not your financial outcome.

Your stockbroker’s fancy title is not awarded for achieving above average investment results for clients’, it is for charging clients big fees and commissions no matter how well your portfolio performed.

Do you think it’s responsible and prudent to trust your “financial life” in retirement and your portfolio and serious money to a salesman rather than a fiduciary like the investment management firm of Chippewa Partners?

Stockbrokers worry about generating income for themselves, before worrying about your results. If they don’t, they lose their job even if market conditions warrant doing nothing with your portfolio. They still need to churn your assets.

Last time we checked, stockbrokers who call themselves financial planners are usually far more concerned with planning their commissions and fees from your portfolio rather than planning your financial future.

When was the last time your broker made any serious money for you or any money at all? Brokers are not trained to trade stocks, they are trained to gather assets and sell investment products. Few brokers have made themselves serious money in the stock market.

A stockbroker's goals are based on "gross production sales credits" which are the fees and commissions charged to clients and not the performance of their client’s investments.

If your brokers are so successful at investing, why are they still working for a brokerage firm and not independently or better yet, why are they still working to generate commissions instead of working at a money management firm on a performance basis?

An area of investing where huge fees are still “hidden” is in annuities. If your stockbroker wants your assets in annuities you better think again. Remember, studies show that most brokerage firm clients think their broker is “free” because he never sends them a bill.

A financial advisor compensated via commissions is really a salesman with huge conflicts of interest with the client and it is in his best interests to keep his client ignorant.

Native American Advisors CHIPPEWA PARTNERS