You may be as tired with the financial shenanigans as we are. You may think no one cares about your financial well-being, from the SEC to FINRA to Wall Street to Congress. You are correct. It is obvious no one cares at the top. Wall Street’s incentives are aligned with themselves; not aligned to the financial outcome of clients or the welfare of our country, there’s too much money involved for them.
In 2010, if you are going to find a partner you can trust to help you get on track, you’re going to have to find a firm that doesn’t have a hidden agenda, someone whose only business is managing wealth, not selling insurance or financial products.
Our approach is a million miles from what Wall Street has become. We are privately held. We are not investment bankers or brokers. We don’t answer to a parent company or a government mandate.
Chippewa Partners is a privately owned fiduciary firm, founded in 1995 that is controlled by the professionals who are actively involved in all facets of the firm.
For us it all begins with our clients. When our clients win, we win. You need a firm who puts their clients’ needs first and understands that success is measured by meeting long-term performance objectives. Our business is not one of commissions and churning. We think that investors who still use stockbrokers to manage their retirement assets should reexamine their conflicted advice and hire a fiduciary investment manager instead of a salesperson.
Ask yourself, how do you know if you can trust the advice from your current financial advisor? Do stockbrokers work for you or against you? The answer might surprise you.
Under what's called "the Merrill Lynch rule," stockbrokers are allowed to work against the best interest of their customers. By contrast, an independent fee-only investment manager who does not work for a brokerage firm has what's called "fiduciary duty." That simply means they must do what's best for you. Surprisingly, most investors are very misinformed on this point. Today, your stockbroker is only required to recommend buys and sells that are suitable for you, not necessarily in your best interest.
A study by the Wall Street Journal found that roughly two-thirds of investors thought stockbrokers had to work for them. If you do business with a stockbroker, you do so at your own risk. As a common example, if a broker puts your money into a bond fund, that broker can legally look for the most expensive option available in the many bond funds in the market.
So be sure you know what most investors don't -- that stockbrokers help themselves first and you second. Brokers are far more concerned about their income than your outcome.
We know that financial advice should be objective, personal and unbiased. As a Registered Investment Advisor we are fiduciaries. We are an exclusive Fee-Only advisor and will always avoid the conflicts that are inherent with brokers. Our investment counsel is objective and we have no potential for conflict-of-interest with commissions. This allows us to serve as a trusted fiduciary firm.
Listening to the firms founder, Dean Parisian speak about Wall Street is like Henry Markopoulos talking about Bernard Madoff to the SEC. As a veteran arbitrator for the NYSE and NASD for over a decade he knows Wall Street chicanery inside and out. He knows what’s deeply wrong with the sales culture and utterly rejects that part that stands in perpetual conflict with the needs of investors. Few areas of the securities world exhibit as clearly the relationship between a broker and a customer. Brokers succeed by extracting the highest possible fees. Customers of brokerage firms succeed by paying the lowest possible fees. Brokers succeed with short-term churning of positions. Sensible investors evaluate every statement from their broker with unabashed skepticism.
Never forget, the economic role of a client for a brokerage firm is to enrich the broker. Stockbrokers are trained to sell investments that generate huge fees and commissions and typically have an agenda other than your financial welfare. The full service offered by full-service brokers generally impairs a customers odds of investment success. Full service includes demonstrably worthless research. Full service encompasses clearly irrelevant broker advice. Full service costs materially more and the bottom line is this, investors who employ full-service brokers pay a very real something for an extremely costly nothing! When a sophisticated provider of financial services who runs a bull across the flat-screen every weekend stands toe-to-toe with a naïve consumer, the all-too-predictable conclusion resembles the results between a heavyweight champion and a ninety-eight pound weakling. The brokerage firm customer loses in a first-round knockout.
The interests of Wall Street are not aligned with those of investors. The SEC makes it very clear; investors should never let their guard down with brokers who have a sales agenda. Do you really want to trust your retirement to a broker-salesman? As an arbitrator Mr. Parisian censured many stockbrokers and knows that investors often confuse a sales pitch with impartial investment advice.
Do you think Harvard University, Bill Gates or Warren Buffett use stockbrokers to increase their net worth and protect their assets? Not a chance. The simple answer is they engage unbiased investment managers. They engage Registered Investment Advisor fiduciary firms to manage their assets. So should you.
CEO of the Parisian Family Office. Retired/Founder of CHIPPEWA PARTNERS, Native American Advisors, Inc., Registered Investment Advisor. White Earth Chippewa, educated conservative, raised on Indian reservations across Great Plains. Began Wall Street career in 1982. Always been, will always be, an optimist. Pureblood, clot-shot free. In a world on a dopamine binge, this is his take on life. Written at MT Ghost Ranch or Pamelot, TN farm or his winter camp in San Jose del Cabo, Mexico.
Thursday, December 17, 2009
And speaking of stockbrokers and BS.........
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