Solutions, Self Defense and Best Practices

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Re: Solutions, Self Defense and Best Practices

Postby admin » Tue Mar 21, 2017 3:08 pm

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“Dear ABC Bank,

I would like to ask ABC Bank if it is true that most ’advisors’ of ABC Bank, and in specific, the ‘advisors’ that ABC Bank allowed to give me financial advice on my investment accounts, are or were legally registered in the category of “advisor”, as they represented to me and in your advertising? I have enclosed some samples of bank “job openings” to show that most banks advertise “advisors”. Is it a true form of advertising or have Canadians been duped?

Or were they legally registered as “dealing representatives”, which is further clarified as ‘salesperson’ under that registration category, with the Canadian Securities Administrators?

I feel that if this question can be answered by you, I will be saved the trouble of having to retain legal counsel and ABC Bank may be saved the trouble of having to do similar.

Failing a prompt response to this question I feel that ABC Bank may leave me/us am with no other alternative than to continue my search for “fair, honest and good faith” services and answers to my question through legal counsel.

I once again, thank you for simply making my account “whole” as if I had never stepped foot into a ABC Bank ‘advisor’ relationship, to prevent much ado over not very much money. This is becoming more a matter of principle to us than a matter of the dollar value of my account. I would like my initial investment value returned to me/us, with a nominal and reasonable amount of interest for the years that I feel I have wasted with the deception of your employee titles.

Thank you for your prompt attention to this concern, which will allow me to put this matter to immediate rest.  


A Client who wishes “Fair, Honest and Good Faith” disclosure as you promised to me.

Strangely, when I search my ‘advisor” at your institution, I find he holds no such registration/.....

This 1.5 minute video (link below) shows investors how to search and find the difference between a “dealing representative”, which 96% of investment sellers in Canada are found to be concealing......”Hey, isn’t license concealment illegal.....?”
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Re: Solutions, Self Defense and Best Practices

Postby admin » Mon Jan 16, 2017 7:23 pm

Larry Elford says:

Ron Rhodes shares this wish list for investment regulations and protection considerations. Please refer back to this list after the next Black Swan that has our global heads spinning.

Best of 2016

Wish List for the Trump Administration

What any person or legislator would benefit from reading. Any investor will see in this set of simple rules some answers to their investment risk questions, which they have not even thought of yet. Any politician will see this as the way to be a public protective hero. There will come a day (too soon I fear) when the public must turn their full attention to finding those hero’s who truly protect the public interest and not just their self interest. Thanks for this Ron.

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Ron A. Rhoades, J.D., CFP® is an Asst. Professor of Finance at Western Kentucky University's Gordon Ford College of Business, where he serves as Director of its Financial Planning program. This article represents his views, alone, and are not those of any institution, organization or firm with whom he may be associated. Follow Ron on Twitter: @140ltd. To contact him, please email:

Sunday, January 1, 2017
My Financial Services Regulation Wish List for the Trump Administration
Dec. 22, 2016

1. Keep the U.S. Department of Labor "Conflicts of Interest" Rule. Why?

The core of the rule is principles-based. Only 237 words ... that's the Impartial Conduct Standards it applies.
It has already led to decreased asset management fees.

It has been shown that small investors can, and will be served, under a fiduciary standard.
Businesses large and small want the fiduciary standard - so they can rely upon the advisers to their retirement plans, and hold them accountable. No more plan sponsors left "holding the bag" as "retirement plan consultants" escape liability for their really poor recommendations under the inherently weak and ineffective suitability standard.

Many, many investment advisers are able and willing to provide such services, often aided by technology.
It will accelerate the trend away from arms-length product sales, and toward fiduciary-client relationships. Fiduciary status is justified given the high degree of information asymmetry, the necessary reliance by individual Americans on financial and investment advisers.

As trust in financial advisers grows, under a fiduciary standard, so does the rate of utilization of financial advisers. This is a good thing - as Americans need help to save more and invest more wisely.
It provides a foundation for financial and investment advisers to, eventually, become a true profession.
Greater accumulations of capital will result, as investment fees/costs come way down. In turn, this results in:
Greater financial security for Americans, as they enter and are in retirement.
Greater capital accumulation by Americans. And a lower cost of capital for corporations.
In essence, this "supercharges" U.S. economic growth. Greater capital accumulation provides the fuel necessary to transform innovations into new products and services.

2. Sunset B.I.C.E. after three years.

The DOL's Best Interests Contract Exemption is complex. Trying to accommodate commissions and other inherently conflicted sales practices, and fit them into a fiduciary-client relationship, is what causes the complexity.

As the years go by, B.I.C.E. may be interpreted so that its very tough requirements become weakened.
The industry is moving toward fee-based accounts. Good firms that understand how the fiduciary standard truly operates (e.g., Merrill Lynch, etc.) already have rejected the use of B.I.C.E.

It's best to permit B.I.C.E. for a limited period as a means of transition, then to sunset it.

3. Have the SEC alter how it enforces the Advisers Act.

If a person or firm holds out as a "financial adviser" or "wealth manager" or "retirement consultant" or "financial planner" or otherwise uses a title that evokes an adviser-client relationship, they should be held to the fiduciary requirements of the Advisers Act - at all times and without exception.

If the primary role of the person is to provide investment advice, rather than to execute transactions, the "solely incidental" exclusion to the definition of investment adviser should be applied properly and that person should be required to register as an investment adviser and to comply with the fiduciary duties arising from the Advisers Act.

Large amounts of broker-dealer advertisements suggest that advice is the primary component of the broker-customer relationship, and it is certainly understood that way from the standpoint of the customer.
The process of executing trades no longer requires the skill it took in the 1930's, due to the involvement of automated systems, and the improvements in market liquidity.

Registered representatives have been provided education on "trust-based sales techniques," without understanding that the formation of a relationship of trust and confidence with a client leads to fiduciary status under state common law.

The recommendation of another investment adviser should be subject to the fiduciary standard of the Advisers Act. This includes recommendations of separate account managers, as well as recommendations of mutual funds. (The doctrine of suitability was originally intended to shield brokers from liability when their primary role was in executing a trade for a customer; the doctrine should have never been extended to the recommendation of pooled investments.)

No more wearing of two hats. No ability to switch hats. Once you are a fiduciary to a client, your status as a fiduciary continues, and it extends to all aspects of the adviser-client relationship.

Estoppel and waiver have limited applicability to fiduciary relationships. Sect. 215 of the Advisers Act needs to be properly applied to prevent both "disclaimers" of core fiduciary duties and seeking client "waivers" of them.

The SEC must realize that, although the securities laws generally are based upon disclosures, the Advisers Act went much further. We have fiduciary standards because disclosures are largely ineffective. A huge body of academic research supports this conclusion.
Say what you do. Do what you say. A fiduciary steps into the shoes of the client, and acts - with all of the expertise required of a professional adviser - with total loyalty to the client's interests.

Let's not keep permitting "particular exceptions" (as the late Justice Benjamin Cardozo opined) to erode the fiduciary standard of conduct. Let's conform the industry to the standard, and not the standard to the industry.

4. Clean up mutual fund regulation.

Europe and Canada have stronger disclosures of mutual fund / ETF fees and costs than the U.S. possesses. We lag behind, again, instead of leading the way.

"Portfolio turnover" is measured incorrectly. It should not be the lower of sales or purchases divided by the fund's net assets, but the average of them. This important statistic - as the SEC now permits it to be calculated - can often mislead investors.

Require in all mutual fund / ETF advertising truthful comparisons to broad-based indexes. No more comparing active funds only against indexes that exclude index funds in their computations.
Do away with state-based and municipality-based retirement accounts. This is not the essential role of government.

5. Work to reduce regulatory overkill.

Every regulation on the books should be reviewed. Does it work? What is the burden of the regulation, versus its benefit?
Increase the number of RIA exams for verification of assets (i.e., custody); but decrease substantially the number of RIA exams for everything else. Investment advisers are professionals - treat us like such. And use the SEC's limited resources to combat the most egregious frauds.

Take a good hard look at FINRA. With hundreds of pages of rules, it still has utterly failed the vision of its creators - Senator Maloney and others - who sought to create an organization that would raise the securities industry's conduct to the highest levels. In fact, FINRA has opposed raising standards at every turn. FINRA embraces conflicts of interest at every turn, rather than seek to minimize them - even broker-dealer fines levied by FINRA become part of FINRA's budget (thereby lessening the fees assessed against broker-dealer firms!). Consider whether FINRA's oversight of market conduct regulation should be transferred back to the SEC, or snapped altogether.

Lastly, permit me to include an economic imperative in my "wish list." Invest in people - through education. The most effective intervention to promote long-term economic growth is that of expanding educational opportunities for all. Yet, financial support for higher education has diminished over time. This, along with increased federal regulatory mandates (requiring more administrative staff to comply with all the regulations), has led to high tuition costs and, as a result, huge student loan debt burdens.

Additionally, interference in primary and secondary education (mandatory testing, etc.) has created the perverse incentives ("teach to the test," etc.) that have diminished the quality of the education provided by dedicated teachers in our schools. Multiple-choice test questions encourage a focus on recognition via cramming for tests and exams. Students now focus more on the acquisition of test-taking skills for multiple-choice exam questions, rather than the acquisition of true understanding of concepts and long-term memory formation. From the standpoint of a college professor, students entering college lack critical thinking, writing, and verbal communication skills one would expect from a college freshman. While I willingly tackle the challenge of increasing these skills in my students, a better foundation in these skills before students enter college would lead to a better overall college learning experience.

As technological progress destroys many jobs, our society is in need of a more educated workforce - especially graduates of high-quality vocational educational programs. Let's invest in education, and reduce regulatory burdens imposed from above upon colleges, high schools, and primary schools. In so doing, empower America to meet the demand for the skilled jobs of tomorrow.

Ron A. Rhoades, J.D., CFP® is an Asst. Professor of Finance at Western Kentucky University's Gordon Ford College of Business, where he serves as Director of its Financial Planning program. This article represents his views, alone, and are not those of any institution, organization or firm with whom he may be associated. Follow Ron on Twitter: @140ltd. To contact him, please email:
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Re: Solutions, Self Defense and Best Practices

Postby admin » Tue Apr 05, 2016 5:53 pm

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Some great solutions and descriptions of the problems to be solve, can be found in the first portion, executive summary and Introductory Comments of this Ontario Minister of Finance study: See quotes of interest/summary below:

There is an absence of an explicit obligation for providers of Financial Planning or Financial Product Sales and Advice to act in their clients’ best interest. This is detrimental both to consumers who rely on these services to achieve their financial goals and to confidence in the financial services industry.

The plethora of titles and designations utilized in the financial services industry may cause consumer confusion, making it difficult for consumers to be certain of the qualifications and expertise of their financial advisory or financial planning service providers.

There is a stark asymmetry in financial knowledge between providers of Financial Planning or Financial Product Sales and Advice on the one hand and consumers on the other.

We recommend that a Statutory Best Interest Duty2 (SBID) be adopted and applied to all individuals who and firms that provide Financial Product Sales and Advice and/or Financial Planning in Ontario. This SBID should be based on a uniform and codified standard of care.

We recommend that the use of titles by individuals and firms engaged in the provision of Financial Product Sales and Advice and/or Financial Planning be prescribed in order to reduce consumer confusion.

Those engaged in providing Financial Product Sales and Advice and/or Financial Planning are not permitted to use corporate positions or titles given the consumer confusion that results and can result from the use of such titles. ... tions.html
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Re: Solutions, Self Defense and Best Practices

Postby admin » Sun Apr 03, 2016 7:20 pm


DRAFT Resolution on Regulation of the Financial Securities Industry    Presented to Policy Convention 2016


Most Securities regulators in Canada are “self”-regulatory and can use this to often bypass investigation and prosecution of industry wrongs.


The financial industry pays the salaries of the regulatory force, rather than the taxpayer. This means that clever financiers get to choose who to hire to regulate financiers. i.e. hiring your own police


The financial industry pays regulators three to four times more than what they would earn in similar employ elsewhere; over-paying makes regulators “compliant” and more willing to say “YES” to the financial industry; In consequence, failing to protect the public.


All thirteen (13) securities commissions, acting in concert will allow any financial institution in the country to be exempt from our Securities laws, simply by completing an application with no public debate and no public notice.


Securities Regulators and Self-regulators in Canada have representation on the RCMP Investigation Units which further allows the investment industry to avoid criminal prosecutions.


That the (name deleted) Party of Canada adopt policy supporting and implementing major changes to the Securities regulatory system in Canada.

Establish a national Investor Protection agency with the following attributes:

1. Separating all investment police functions and investigations from the securities commission and the securities industry. A separate, specialized, Securities Crime Police Unit would be formed.

2. The government appointing Regulators representative of the public interest and that will be paid by the taxpayer, not industry.

3. Allowing no exemptions to the law, except in extreme cases where full public discourse and disclosure can show no damage to the investing public by such exemption.

4. Separating the Securities commissions and industry paid regulators from the RCMP Investigation Units and any police agency.

5. Enforcing rather than ignoring the Criminal Code for the Financial Industry.
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Re: Solutions, Self Defense and Best Practices

Postby admin » Thu Oct 01, 2015 3:46 pm

Five, "Billion Dollar" questions for any investment "advisor".

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In Canada the financial regulators are proposing new CRM (client relationship disclosure models) to better "protect" consumers.

The trouble is that the new CRM info does every bit as good a job of hiding the most important factors in an investment advisory relationship. In the US, these most important items are also well, well hidden from investors.

Here, then, for the record, is a Recovering Broker's list of the FIVE MOST IMPORTANT QUESTIONS to put towards anyone offering you investment "advice".

What EXACTLY does your license or registration say that you are registered as? (Please do NOT tell me your "title", or your latest correspondence course)

What legal duty of care, (TO PROTECT THE CLIENT), comes WITH that license or registration?

Is it a FIDUCIARY or a SUITABILITY duty or standard of care?

Can you provide that duty of care to me in writing, on your firm letterhead, or direct me to where this is written/sourced?

Can you direct me to a source where I can better understand the risks and benefits between a fiduciary or a suitability advice standard?

These questions will cause commission salespeople to choke, or talk very very fast……while true financial professionals will smile and gladly answer each one. You will understand whom you are dealing with simply by being witness to their reaction...

Here is a short one minute view of retired TD CEO Ed Clark, revealing the "counterpart" game that bankers prefer not to reveal, then a couple minutes by Tony Robbins on the concept of a fiduciary.

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These questions are worth billions to the industry, to HIDE from you, and to you they are worth possibly a DOUBLING your long term future retirement capital, if you learn the differences.

View this video which looks at SEC Advisor rules, and shows how 99% of "advisor" persons in the US are "exempt" from following SEC rules or being governed by the SEC…..oops!

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Please send me any thoughts suggestions, improvements or comments to improve this list, and PLEASE SHARE it, as it is very difficult for ordinary investors to gain access to information truly intended to protect their interests.

Follow me at:

Larry Elford, former CFP, CIM, FCSI, Associate Portfolio Manager


Twitter: @RecoveredBroker

Facebook group for Fraud victims

Facebook group for Fraud victims across Canada (Small Investors Protection Association of Canada, 1998)

Video site for victims of investment malpractice ... ature=mhee

"The main thing I have to remember is to always try and keep the main thing, the main thing."
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Re: Solutions, Self Defense and Best Practices

Postby admin » Wed May 27, 2015 2:22 pm

Three “secret-tips” that your investment “advisor” will never share with you.


How to put an additional one million dollars into your retirement fund, or let it instead go into the pockets of the investment industry…..

Secret tip #1. Search the exact license and registration category held by the person claiming to be your “advisor”.

Use the FINRA Broker Check site:

or the SEC Adviser Search site: ... earch.aspx

(Now just for fun and curiosity, note how the SEC spells “adviser”, and note how your “advisor” spells it….put that info away in the back of your mind for now)

Secret tip #2. Spend just 20 minutes on Google or another search engine, looking this up: difference between a broker with a “suitability” (close enough☺) obligation, and an Adviser with a professional “fiduciary” duty to you and to none other. 

By doing this, I believe that you will learn something more valuable than the last one hundred telephone calls and meetings, with your current “advisor”. (Add this info to the crazy idea that perhaps there is a difference between the person using an “adviser” or an “advisor” title. In some jurisdictions it is THE trick.)

Secret tip #3. Hone your spider-senses to the absolute perfection, as well as the absolute bullshit, of the investment industry “bait and switch” marketing. This is the advertising, luring, baiting and promising of trusted financial professionals, whilst cleverly switching the “product” upon delivery to that of an extremely conflicted commission salesperson or broker. One with massive industry incentives and SEC loopholes to NOT have to place your interests first. 

Video link here explains the SEC loopholes which exempt 95% of “advisors” from having to protect you from selfish or predatory investment sales practices: ... ature=mhee

Free web site dedicated to revealing systemic investment industry practices which are intentionally harmful to the customer: (Canadian and America content discussed) viewtopic.php?f=1&t=193

Please find me on Twitter @RecoveredBroker and also here, to engage for change:
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Re: Solutions, Self Defense and Best Practices

Postby admin » Thu Feb 26, 2015 8:31 pm

As a professional "Investment Bodyguard" I found this article well written and insightful. Readers looking for an alternative to what information is offered out there might benefit from one on one, sit down education and/or discussion sessions with a coach (or bodyguard:).

It is like having a very close friend, who is an expert in the field of interest, who will sit with you and talk endlessly in plain, clear language, while not having any hidden conflicts of interest. Costs about the same as hiring an engineer or psychologist by the hour. Could be worth half your future retirement…or more.

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Imagine that sometimes the broker, otherwise know as the "advisor", might be the pickpocket in your financial relationship… do you know who to trust and how do you learn the ropes?

Investment Coaching: Catering to the DIY Investor

February 24, 2015 by makinthebacon Leave a Comment

If you're new here, you may want to subscribe to my RSS feed. Thanks for visiting!

One of the great things about the investment course I’m currently taking is that from time to time, guest speakers are brought in to talk about various concepts of investing.

The most recent guest speaker was Aman Raina, an investment coach from Sage Investors. You can follow him on twitter @sageinvestors. He delivered an engaging presentation on capital and the balance sheet. We also went through a company’s balance sheet to determine if it was a good company to invest in.

I enjoyed the presentation so much and was very curious about investment coaching because it was the first time I had ever heard the term. This may also be the first time you’re hearing it too! So I reached out to Aman via email and asked him if he could do an interview for my blog about investment coaching and the services his company provides.

Here are his responses to my interview questions:

1. How would you describe investment coaching and how is it different from traditional investment advice?

The traditional financial advisor provides ideas, strategies and recommendations regarding security selection for an investor. This advice is often provided by an individual that can be directly or indirectly associated with a financial services organization and as a result, any advice offered can be potentially tailored to the purchase of financial products that may or may not be appropriate for an investor’s portfolio.

A financial advisor is compensated either by charging a flat fee for specific set of services (developing a financial plan, portfolio management etc) or by taking a percentage commission based on the total assets of the portfolio.

An investment coach focuses on elevating an individual’s financial literacy and decision-making capacity through a combination of education and one-on-one real-time mentoring. An investment coach is an independent third-party resource that is not associated with a financial institution nor do they sell or promote specific financial products. An investment coach can be compensated on a flat-fee basis or on an hourly basis.

2. What made you decide to become an investment coach?

In a previous life, I used to work as an independent investment analyst and specialized in providing customized investment analysis and research using the Economic Value Added portfolio to individual portfolio managers and institutional investors. Over time, I came to a realization that this segment, which has limitless access to investment data really didn’t need much help, let alone help from me. The nature of the investment industry is that the institutions will make their money no matter what.

What I noticed over the years is that these institutions were making their money at the expense of individual investors who were essentially talked down to and treated like 3rd class citizens. I was always getting questions by people who were exasperated and confused by the lack of performance in their portfolios and the lack of support their advisors were giving them. Some of the stories were heartbreaking and frankly made me angry and I always thought there has to be a way to help these people. They are working hard and trying to the right things but the system which in its current form should be helping them was not supporting them. After a series of stock market crashes in early 2000’s, investors just became fed up with what the traditional financial advisor model was offering them and were seeking to take control of their financial decision-making.

The emergence in the last 10 years of the Do-It-Yourself class of investor, who is trying to take control of their financial destiny didn’t just happen by accident. This evolution is commendable, however what I ‘ve seen is that this class of investor still needs an avenue and ideally an objective, independent party to bounce ideas and decisions they are facing rather than having someone sell a product to them. They are also seeking a confidante that will not tell them what to do, but can give them tools and emotional support and discipline that can help them make better decisions.

I looked around and realized while there are many people and companies who are defined as “Money Coaches”, it appears the level of coaching is focussed primarily on learning to save and pay debt . There really wasn’t anyone focussing on the investing side which is a huge component in the process of building wealth over a long period.

Personally, I have always found that the concept of investing in stocks to be intuitively and mechanically simple. Buy well-managed businesses that sell products and services people want, create tangible wealth and buy those companies when they are on sale and sell them when they have reached their intrinsic value or a return we are comfortable with. We know the process. The problem is we do a lousy job of executing it because we lack the education, but more importantly the emotional discipline.

I really believe anyone can learn and develop into a successful investor without getting a CFA or an MBA. I believe it can be done with a time commitment, education, and most importantly working with someone who can instill some structure, discipline, and more importantly working with someone who genuinely wants them to succeed. This is where I feel an investment coach can offer value.

coach talking to players
Image courtesy of pal2iyawit/
3. Could you briefly describe the services your company provides?

We offer 2 streams of investment coaching services. The first stream involves a combination of learning and coaching. We offer these in a monthly module format. For each month, we would undertake the following program.

1-2 hours per week of one-on-one tutorials on key investment topics and concepts that are customized to the protégé’s level of investment knowledge and experience. In a one month module, we’ll go over about 4 learning tutorials.
Another 1 hour per week of follow-up coaching conversations where we will drill down into realtime investment decisions the protégé is facing. The goal is to leverage the learnings from the learning modules to enhance and improve the protégé’s decision making capability.
For each monthly coaching module, we charge a flat fee. There is no fixed long-term commitment required. You can go month-to-month and come back later on. To gain maximum value out of these learning/coaching modules, a commitment to allocating the time is important. The second stream is involves just coaching conversations. We found that many people, especially the more experienced investors, just want to discuss their personal investing situation only. For this service we charge on an hourly basis.

4. How do you determine what kind of coaching a person needs?

One of things I like about coaching is that each person I work with doesn’t fall into a standard cookie cutter program path. Before engaging in a coaching/learning module or individual coaching conversation, I like to meet briefly either on the phone or in person with a potential protégé to understand their background, as well to gauge their comfort level with investing, their risk tolerance, and finally what financial goals they are seeking to achieve. I also ask every protégé how much time they are willing to commit to learning to invest as ultimately their level of commitment will drive the path in how I develop their education and coaching program.

I should note that I do not automatically take on protégés. In some very rare cases after an initial conversation, I have determined that a coaching program may in fact not be beneficial to them and will suggest other more channels that could provide greater benefit.

5. How much of a time commitment is needed to receive investment coaching and is there a lot of homework involved?

In a typical one-month learning/coaching module, a protégé is expected to commit to about 1-2 hours week of participating in a one-on-one learning session along with about an hour per week of coaching conversations. So in a typical month, a protégé will spend roughly 12 hours engaged in learning and coaching conversations. In terms of “homework”, there is some extra research work expected but I try not to make it a chore because if it becomes a chore than it can be procrastinated upon. A lot of it is just reading the newspaper, watching the news or searching online for various investment information, tasks you can do tapping away on your smart phone/tablet while sitting in the subway or lounging at home. These are typical activities you need to do when evaluating investment opportunities.

6. The concept of investment coaching is still relatively new to most people and to the finance industry. Do you see it becoming a growing trend in the near future?

Investment coaching is a very new type of relationship, so I realize that a lot of people have no idea it even exists. I do believe that as more people seek to take control of their finances, they will seek to learn more about investing. I know this is true because you can just go to the book store and find endless shelves of books on investing and also on the Internet where there are numerous blogs and web sites which provide great ideas, resources, and perspectives on investing. The desire to learn is there. The problem is the quantity of information can be overwhelming. Working with an investment coach who can help them learn about how to filter that mountain of information can be invaluable, so as more people become aware, I see investment coaching gaining traction.

7. What do you enjoy most about investment coaching?

At the end of the day, I want to help people be successful and helping them accomplish something that is important to them. Investment coaching has provided me with a great avenue into achieving this. I’ve had the opportunity to work with people who are so committed to learning about investing and improving their financial street smarts. I’ve gained great satisfaction to working with people who come in with little understanding about investing and seeing them develop to make better more successful investment decisions. The great part is they made it happen! They own it and it is likely to stay with them. They have worked hard to develop their financial competency. It’s great to see people become more confident in their capabilities. I also enjoy the fact that because I’m not tied to any other financial company or affiliate, I can express my ideas and thoughts good or bad without fear of being shackled down. So people working with me know I am telling it like it is.

8. What requirements does one need in order to become an investment coach?

There is no registered certification for being an investment coach, however I would say a good investment coach or any type of coach should possess core competencies such as being able to listen with empathy, an ability to synthesize large volumes of information and articulate them in a matter that a protégé can understand, along with being comfortable with working with people (when you sign up as an investment coach, you’re now in the people business!) as well as being flexible and adapting the coaching/learning program as the relationship with the protégé evolves.

In addition, the investment coach should carry themselves with a high level of professionalism and transparency. Finally, an investment coach should have the obvious proficiency in investing. In my case I’ve done a fair amount of formal school training (B.Commerce, MBA, Canadian Securities Course etc) to develop my investment skillset along with thousands of hours in analyzing and evaluating companies and their stocks. In a way I feel very much like an Outlier. Malcom Gladwell would be proud of me!

9. What advice would you give to someone who is considering becoming a DIY investor and/or considering investment coaching?

The first question I ask potential protégés is how much time they are willing to commit to learning about investing. If they really don’t have the time or couldn’t be bothered with understanding the nuances of how companies create wealth and how to evaluate stocks, but they still want to have exposure to the stock market, then I would create a program that give them the fundamentals of understanding passive investing and more importantly how to be more street smart when interacting with the financial community. If they are indeed willing to put in the time to learn and understand the technical and behavioural intricacies of investing then I would create a different kind of program. Neither path is a bad road to take. The reality is everyone is in a different space when it comes to investing. That would be the first thing someone considering becoming a DIY investor needs to have. They need to have clarity in themselves before moving forward either going it alone or with a counsel like an investment coach. ... e+Bacon%29
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Re: Solutions, Self Defense and Best Practices

Postby admin » Fri Jan 30, 2015 1:59 pm

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New Best Practices Aim to Codify Advisors' Fiduciary Duty

JAN 30, 2015
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A coalition of fiduciary advocates has unveiled a set of best practices for advisors that they envision could eventually become an industry certification, providing consumers with an easily recognizable designation that a financial professional is bound to act in their best interest.

The 11 principles, ( ) issued by the Institute for the Fiduciary Standard, aim to codify standards of conduct for the investment advice industry and help investors distinguish between "product sellers and advice givers," explains Knut Rostad, president of the institute.

"In recent times the meaning of fiduciary has been transformed. Investors have been confused, skeptical or downright distrustful of many financial professionals," Rostad said in a news conference announcing the best practices.

The institute is asking industry members and other interested parties to submit comments on the draft principles. Once the comment period closes March 9, a council of experts that Rostad's group has convened will review the feedback and aims to issue a final version of the best practices in June or July.


Rostad and others involved with establishing formal best practices see them as a way of drawing a bright line between fiduciary advisors who are duty-bound to put their clients' interests before their own, and other professionals -- including unscrupulous wealth managers -- who might prioritize their own profits and offer deeply conflicted advice.

"Far too often, the interests of asset managers and registered investment advisors overwhelm the interests of investors," Vanguard founder Jack Bogle, who co-chairs a council of advisors on the institute’s best practices, says in a statement. "In short, salesmanship has trumped stewardship in our nation's financial system. The time has come for the field of investment advice to return to its traditional values of fiduciary duty and trust."


As a starting point, Rostad notes that fiduciary advice requires technical qualifications -- such as education and experience -- and ethical criteria, namely "character, honesty and transparency."

The new best practices focus on the ethical dimension of fiduciary advice, calling on advisors to affirm in their engagement agreements with clients that they are themselves fiduciaries as that term is defined in the 1940 federal Investment Advisers Act, and that that definition "governs the professional relationship at all times."

Next, the institute is calling on advisors to generate documentation outlining the "reasonable basis" for advice provided that’s in the best interest of each client, including a description of the investor's goals and circumstances, as well as a more detailed explanation of the specific investment strategies the advisor has developed.

The best practices touch on several of the overarching duties that backers of a strong fiduciary standard advocate, including a duty to act "prudently" and in "utmost good faith," to avoid conflicts whenever possible and to control investment expenses.


For instance, the best practices call for advisors to provide clients with clear and truthful communication, to make all disclosures in writing and to issue, on at least an annual basis, a full accounting of the fees and expenses the client has paid.

Similarly, the guidance urges advisors to avoid forms of compensation that could create a conflict and potentially skew their recommendations, such as major gifts, certain sales commissions and third-party payments.

Taken together, the best practices are a response to what the institute describes as pervasive investor confusion about the business models of advisors and broker-dealers, including how they're compensated and what services they offer, a picture that's further muddied by convoluted explanations of fees and expenses.

Once the best practices are finalized, the institute will begin work on a verification system where a third party would evaluate an advisor's practice and determine whether to confer the fiduciary designation.

"These best practices really seek to make it very clear as to which side of the aisle a financial advisor sits on," says Brian Hamburger, CEO of the RIA compliance firm MarketCounsel, who is serving as chief counsel to the group that drafted the new principles.

Rostad stresses that his team has not yet worked out how the verification process will work, or whether it might take the next step of developing a formal industry credential through that review.

"I think that we are steps away from that right now, but that is clearly one of the options," he says.

But he argues that investors need better tools to help them navigate an increasingly complex financial services sector, and warns of a "deeply troubling" trend in Washington where the policy debate seems to be shifting toward a watered-down version of fiduciary duty that would sanction conflicted sales practices.


At the SEC, regulators have been considering whether to adopt a uniform fiduciary standard that would apply in equal measure to advisors and broker-dealers.

Rostad says he is skeptical that the commission will actually enact such a rule, but in the event that it does, he expects that the final regulation would fall well short of the best practices his organization is urging advisors to embrace on their own.

"Even if the SEC does proceed," Rostad says, "if this industry we call advice truly wants to develop into a profession, it's going to be because the practitioners themselves make it happen, and not because of any government regulators."

Eleven principles ... l-copy.pdf


Thursday, January 29, 2014 EMBARGOED UNTIL 4.30PM ET 1.29.15 Information: Knut Rostad, 301-509-6468

Institute Proposes Best Practices for Advisers and Brokers Seeking to Meet True Fiduciary Standard

Product Sellers or Advice Givers? Best Practices Put this Question First Vanguard Founder John C. (Jack) Bogle: “The time has come to return to traditional
values of fiduciary duty. The ‘Best Practices’ proposal ... is an important first step”

San Diego, January 29 -- The Institute for the Fiduciary Standard today proposed eleven Best Practices fiduciaries should meet to serve the best interest of their clients. The Best Practices are released today for public and industry comment due March 9 and are available at
Knut A. Rostad, president of the Institute for the Fiduciary Standard, said in a statement, "Fiduciary duties have defined relationships of trust and confidence in investment advice for generations. Yet, in recent years the meaning of fiduciary has been transformed, so many investors today are confused or skeptical or downright distrustful of financial professionals – even fiduciaries. Investor misconceptions about who’s selling products and who’s offering advice, and what they pay, are pervasive.”

“This ‘Made in Washington’ confusion parallels a ‘new view’ of fiduciary, seen in statements of regulators, policymakers and brokerage lobbyists. This 'new view' suggests a true fiduciary standard is unnecessary or outright harmful and must be altered to better accommodate conflicted sales practices. This ‘new view’ is profoundly ‘anti fiduciary’ and deeply troubling."

“Best Practices are designed to help investors identify true fiduciaries committed to objectivity, transparency, and plain English communications. Crafted to be concrete, verifiable and understandable – Best Practices communicate to investors how true fiduciary advisers and brokers are a breed apart,” Rostad concluded.

Vanguard Founder Jack Bogle on the Best Practices

Vanguard founder John C. (Jack) Bogle, who co-chairs the Council of Advisors on the Best Practices initiative, notes: "America’ s bloated financial system has earned the distrust of our nation’ s investors. Far too often, the interests of asset managers and registered investment advisors overwhelm the interests of investors. As it is said in holy writ, “No man can serve two masters.” In short, salesmanship has trumped steward-ship in our nation’ s financial system. The time has come for the field of investment advice to return to its traditional values of fiduciary duty and trust. The “Best Practices” proposal of the Institute for the Fiduciary Standard is an important first step."
Tamar Frankel on Investor Mistrust , “Not since the 1930’s .....
Boston University fiduciary law scholar, Tamar Frankel, who also co-chairs the Council of Advisors for the Best Practices initiative, underscored the relevance of investor distrust, "
Not since the 1930s have investors so mistrusted their advisers. Advisers must take this mistrust seriously
. The time has come for advisers to publicly explain how they are committed to fiduciary principles in the service of their clients."

NAPFA, Institute Best Practices Partner
The National Association of Personal Financial Advisers (NAPFA) partners with the Institute
on the Best Practices Initiative. NAPFA CEO, Geoffrey Brown, states, “The development of advisor best practices supports NAPFA’s goals of advancing fiduciary principles to protect consumers and elevate the ethical and educational standards for financial planning professionals. We look forward to hearing the feedback garnered through the public comment period.”

Best Practices Board
The Best Practices were drafted by the Best Practices Board over the past ten months. The Best Practices Board members are:
Clark M. Blackman II, CFA, CPA/PFS, AIF, Alpha Wealth Strategies LLC Bryan D. Beatty, CFP ®, AIF ®, Egan, Berger & Weiner LLC
Christopher W. Cannon, CFA, Firstrust
William C. Prewitt, M.S., CFP ® Charleston Financial Advisors, LLC Knut A. Rostad, MBA, AIF®, Institute for the Fiduciary Standard
Institute Developing Protocols and Procedures to Verify Compliance with Practices
The Institute is working with outside experts to develop procedures to verify that an adviser or broker meets the Best Practices. Brian Hamburger, Chief Counsel to the Best Practices Board notes, "We can create the greatest set of standards for the industry, but this initiative seeks to go beyond that. If a firm's achievement against these practices is not measureable then they will have little value and no merit."

Public Comment

The Institute seeks public and industry comments on the Best Practices, and asks that these comments be emailed to the Institute by Monday March 9, 2015 at:

Sources for Comment on Best Practices
Michael E. Kitces
Partner, Director of Research Pinnacle Advisory Group
Columbia, Maryland; 703-375-9478
Daniel B. Moisand
Principal and Financial Advisor
Moisand Fitzgerald Tamayo; 407-869-6228
Ron A. Rhoades, JD, CFP®
Asstistant Professor, Business Department Alfred State (SUNY); 607-587-3469
Council of Advisors
The Council of Advisors formed to advise the Best Practices Board in crafting best practices for fiduciary advisors.
The Council of Advisors is co-chaired by John C. (Jack) Bogle. Founder, The Vanguard Group and Tamar Frankel, Michaels Faculty Research Scholar at Boston University School of Law. Council members include: Steven G. Blum, The Wharton School, Deborah S. Bosley, The Plain Language Group, Robert G. Kennedy, University of St. Thomas Opus College of Business, Woodrow W. Leake, retired university professor, and Edward J. Waitzer, Osgoode Hall Law School and Schulich School of Business, York University
Knut A. Rostad, President
Institute for the Fiduciary Standard Office: 703-821-6616 x 429 Mobile: 301-509-6468
Proposed Best Practices
January 2015 Introduction

Today, a wide range of financial professionals serve investors in a dynamic and complex market place. ‘Best Practices’ are designed to assist investors in evaluating and selecting investment advisers and wealth managers from among these diverse professionals. Investors seek guidance which is objective, transparent, and understandable. Best Practices, crafted to be concrete, verifiable and understandable, exist to assist them in doing so.
Fiduciary principles include two sets of competence criteria. “Technical” criteria such as education, expertise and experience, and “ethical” criteria such as character, honesty and transparency. Both are important, particularly so when both investor and regulatory shortcomings are ubiquitous. (See Institute white paper, ... s/2014/05/ BestPracticesPaperMay13.pdf. ) Yet, today, ethical criteria need greater strengthening and present significant risks to investors. They are the focus of Best Practices. (See Institute whitepaper, ... 102014.pdf

Investor misconceptions about what advisers or brokers do and how they are compensated, and how much investors themselves pay for these services are all well-documented. The Best Practices Board believes strengthening practices regarding conflicts of interest, opaque and unreasonable fees and expenses, and incomplete or incomprehensible communications can address these concerns.

Codes of ethics and practice standards are generally developed and administered in four phases: i.e.: discussion and analysis, recommended practices, required practices and verification or enforcement. Each phase serves a purpose. Yet, the central question is what practices are required and verified or enforced. Best Practices are written to be understood by Main Street investors and to be concrete and verifiable as opposed to aspirational. (This ‘Plain English and verifiable’ attribute is especially important today where, fairly or not, investor distrust of Wall Street and financial services has seeped into investors’ views of advisers and brokers and is pervasive.)

Best Practices follow on the Institute whitepaper, content/uploads/2013/09/InstituteSixCoreFiduciaryDuties.pdf. They are also informed by the good work of others in the professional standards arena; i.e.: fi360, CFP Board, AICPA/ PFS, CFA Institute. Also, writings that include, The New Fiduciary Standard (Hatton), The Management of Investment Decisions (Trone, et al.) and The New Wealth Management (Evensky, at. al.) 1
Best Practices strive to reflect the best legal scholarship and current practices; i. e.: as evident in how conscientious fiduciaries serve clients’ best interests today. This entails assessing risks and costs and the wide variety of strategies in differing facts and circumstances. This requires both prudence and flexibility to meet diverse client risk profiles and levels of client sophistication. This we have strived for. On this and the particulars of the eleven Best Practices we seek industry and public comment.
Fiduciary duty requires that advisers,
and brokers giving advice,
put their client's best interests first. Fiduciary practices spell out how advisers and brokers should serve their clients.
General Practices
1. Affirm that the fiduciary standard under the Advisers Act of 1940 governs the professional Relationship at all times.
This language is placed in the engagement agreement.
2. Provide a “reasonable basis” for advice in the best interest of the client.
The “reasonable basis” documentation includes relevant facts, analysis and circumstances. The scope and nature of the client engagement and a client’s goals and overall circumstances are central to the breadth of analysis. The relevant facts should include key assumptions, the universe of data considered, and the analysis applied. 2
Further, more prescriptive documentation regarding the selection of investment vehicles, may include a more detailed group of factors which include: “liquidity, marketability, minimum required investments ...” and risk. 3
Duty: Act in Utmost Good Faith
3. Communicate clearly and truthfully, both orally and in writing. Make all disclosures and agreements in writing.
4. Provide, at least annually, a written statement of total fees and underlying expenses paid by the client. Include an accounting or good faith estimate of any payments to the advisor or the firm or related parties from any third party resulting from the advisor’ s recommendations.
The purpose of this practice is to increase transparency and understanding of investment expenses. An increased understanding requires including the costs of the underlying investments investors pay with the advisory fee in calculating total fees and expenses. In the case of mutual funds, this typically includes the expense ratio and transaction costs. To be complete, the annual statement of fees and expenses must include these underlying investment expenses.
While improvements have been made, the industry remains too opaque about underlying investments’ fees and expenses. Expense transparency may fall into four categories. Some expenses (mutual fund expense ratios) are readily available. Other expenses are not available but can be calculated. Still other expenses cannot be calculated but may be reliably estimated. Finally, there are some expenses that may not be either calculated or reliably estimated. Consequently, any client’s annual underlying expenses may include expenses that are simply reported, those which are easily calculated, those which must be estimated and those which cannot be reliably estimated.
Thus, calculating or estimating underling expenses can be met in a variety of ways. Here are four. First, it may be met through an accounting of the actual expenses associated with the investments. Second it may be met through a good faith estimate of the underlying expenses. A brief overview explanation of the basis of this good faith estimate should be included. Third, it may be met through a combination of these two approaches. Forth, this practice may be met through an accounting and / or estimation of a typical firm portfolio with allocations that resemble, but most assuredly are not the same as, the client’s.
Additional disclosure on a quarterly basis reminding clients of fees and expenses is beneficial. However, it should not substitute for an annual fees and expense report.
Duty: Loyalty - Avoid Conflicts of Interest; Disclose and Manage Unavoidable Conflicts
5. Avoid all conflicts and potential conflicts. Disclose all unavoidable potential and actual conflicts. Manage or mitigate material conflicts. Acknowledge that conflicts of interest can corrode objective advice.
A conflict of interest disclosure document is created as an addendum with the engagement agreement.
Managing material conflicts involves several steps. First, there must be clear, complete and timely disclosure. Second, fiduciaries must have a reasonable basis for believing that clients fully understand the implications of the conflict to the advisor and client. Implications may include the relative merits and risks of options not chosen by the advisor, and the additional fees earned by the advisor (whether paid out of client funds or not) and any additional client paid expenses incurred. Third, the client must provide "informed, intelligent, and independent" consent before the transaction is completed. Finally, after receiving client consent, the advisor must also be able to demonstrate that the transaction remains reasonable and fair and consistent with the client's best interest.
Additional care should be taken with the highest risk transactions that, for example, may carry material conflicts as well as high commissions. Two examples of such transactions, in certain situations, are indexed annuities and proprietary products. For these transactions, additional care should include:
• Duplicative compensation is credited back to the client or, if this is not possible, at minimum, is not accepted by the firm or individual fiduciary and donated to a charity.
• Further, prior to proceeding with the transaction, the client may review the terms of the proposed transaction in writing for seven days.
Regarding indexed annuities, while the underlying concept may be attractive, the conflicts associated with the high commissions in the current distribution channels – such as a 6% upfront commission – are very difficult to overcome.
6. Abstain from principal trading unless a client initiates an order to purchase the security on an unsolicited basis.
Principal trading “Occurs when a brokerage buys securities in the secondary markets, holds these securities for a period of time and then sells them. The purpose behind principal trading is for firms to create profits for their own portfolios through price appreciations.” 4
This practice applies to the individual fiduciary, not to the firm. The adviser or broker may purchase the security on a ‘best execution’ basis. The fiduciary must disclose that the firm’s analysts have determined that the firm’s best interest is to sell this security from its inventory.
7. Avoid significant gifts, third party payments, sales commissions, or compensation in association with client transactions that cannot be directly credited back to the client or managed as a fee offset.
This includes payments directed to the adviser or broker and includes soft dollars, subsidies, shelf space payments, 12b-1 fees paid to the firm.
This practice seeks to avoid compensation that is duplicative or can impair objectivity. Some commissions will not, per se, be covered by this practice. An example of a commission that is not covered by this requirement would be one consistent with the adviser’s other fee arrangements with existing advisory clients, such as C-class shares when handling small accounts, and is provided to the adviser when he or she is not otherwise compensated for the service.
It is important to avoid compensation, gifts, or remuneration that are not inconsequential or whose value exceeds $100 and that may impair objective advice or may be reasonably perceived to do so.
Duty: Act Prudently -- With the Care, Skill and Judgment of a Professional
8. Ensure baseline knowledge, competence, experience and ongoing education appropriate for the engagement.
Baseline knowledge and experience as demonstrated by holding industry accepted designations, which include: AICPA/PFS, CFA, CFP, ChFC, Masters in Financial Planning
9. Institute an investment policy statement (IPS) or an investment policy process (IPP) that is appropriate to the engagement and describes the investment strategy. Consistently follow and document a prudent process of due diligence to research and analyze investment vehicles; on request, document the prudent process applicable to any recommendation.
The IPS or IPP may be of varying lengths, but it should express, at minimum, assumptions regarding objectives, risk and expectations regarding performance.
10. Have access to a broad universe of investment vehicles that provide ample options to meet the desired asset allocation and in consideration of widely accepted criteria.
Duty: Control Investment Expenses
11. Consider peer group rankings in ensuring compensation and expenses are reasonable.
Controlling investment expense should not interfere with the fiduciary being able to recommend from a broad array of securities and other investment vehicles consistent with the client’s risk tolerance, time horizon and sophistication. Similarly, broad discretion does not free the fiduciary from the duty to avoid unnecessary expenses and the duty to justify investment costs, particularly if they exceed peer group averages or typical expenses for the risk assumed. Similar to the working definition of “best execution,” controlling investment expenses does not require the least expensive alternative; it does require a reasonable basis and full explanation for higher than “average” expenses.
Data sources for peer group expenses may include Yahoo Finance, Bloomberg, fi360 and Morningstar.
End Notes
1. This reference to the good work of other fiduciary experts does not imply their endorsement of the Best Practices; the reference acknowledges their contributions to the field.
2. Statement on Standards in Personal Financial Planning Services, AICPA, Personal Financial Planning Division.
3. Prudent Practices for Investment Advisors, fi360, 2013. See Practice 3.3.
4. Investopedia.
Clark M. Blackman II, CFA, CPA/PFS, AIF ®, Alpha Wealth Strategies LLC Bryan D. Beatty, CFP ®, AIF ®, Egan, Berger & Weiner LLC Christopher W. Cannon, CFA, Firstrust
William C. Prewitt, M.S., CFP ®, Charleston Financial Advisors, LLC Knut A. Rostad, MBA, AIF ®, Institute for the Fiduciary Standard

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Re: Solutions, Self Defense and Best Practices

Postby admin » Mon Nov 03, 2014 9:13 am

Simple, easy common sense

Just as easy as "Quality+ Diversity+ Time= Investment Success", with a few additional details. ... sp=sharing

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Re: Solutions, Self Defense and Best Practices

Postby admin » Wed Oct 22, 2014 10:43 am

Dealing with an #investment #advisor ? Here a #CFA list of things/protectinos you might be missing. #CFA Institute

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Here is the CFA web page where you will find this list of ten things to protect yourself: Seriously….these guys ROCK!!

(CFA principles and professionalism is like the scientists at NASA…… compared to the average investment dealer salesperson/broker who "refers" to themselves as an "advisor" to hide the fact that they are fairly untrained at advice and 1000% trained to earn commission. Those folks (the non registered, non licensed "advisor" types) are the flea-market salesperson selling balsa-wood airplanes, when compared to the skill level of CFA's…….jus sayin. ... condPage/8

The “Statement of Investor Rights” was developed by CFA Institute to advise buyers of financial service products of the conduct they are entitled to expect from financial service providers. These rights reflect the fundamental ethical principles that are critical to achieving confidence and trust in any professional relationship. The list applies to financial products and services such as investment management, research and advice, personal banking, insurance and real estate. Whether you are establishing an investment plan, working with a broker, opening a bank account or buying a home, the Statement of Investor Rights is a tool to help you get the information you need and the service you expect and deserve.

Demanding that financial professionals abide by these rights helps you build trust in the person and/or firm you engage with, and thereby collectively restore trust, respect, and integrity in finance.


1. Honest, competent, and ethical conduct that complies with applicable law;
2. Independent and objective advice and assistance based on informed analysis, prudent judgment, and diligent effort;
3. My financial interests taking precedence over those of the professional and
the organization;
4. Fair treatment with respect to other clients;
5. Disclosure of any existing or potential conflicts of interest in providing products or services to me;
6. Understanding of my circumstances, so that any advice provided is suitable and based on my financial objectives and constraints;
7. Clear, accurate, complete and timely communications that use plain language and are presented in a format that conveys the information effectively;
8. An explanation of all fees and costs charged to me, and information showing these expenses to be fair and reasonable;
9. Confidentiality of my information;
10. Appropriate and complete records to support the work done on my behalf.

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Re: Solutions, Self Defense and Best Practices

Postby admin » Sun Sep 21, 2014 10:11 am ... al-advisor

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You Rate Financial Advisors

How well do you know your current financial advisor or a prospective advisor?

This service identifies a major source of hidden financial risk - what you don't know about your financial advisor.

It only takes a minute to find out. Answer ten questions and click on Rate My Advisor. The results may shock you.

1. Does the advisor have one or more college degrees? (Check one)
Yes (BA, BS)
Yes (MBA, JD, MS)
I don't know
2. How many years of financial planning and investment experience does the advisor have?
3 years of less
4 to 9 years
10 to 15 years
16 or more years
I don't know
3. Is the advisor a Registered Investment Advisor (RIA) or an Investment Advisor Representative (IAR)?
I don't know
4. How is the advisor compensated for his knowledge, advice, and services?
Fee Only
Investment commission only
Insurance commission only
Fee & commission
I don't know
5. Is the advisor an acknowledged financial fiduciary? The acknowledgement must be documented in a service agreement.
I don't know
6. Does the advisor hold one or more of the following certifications: CFA®, CFP®, CIMA®, CPA®, PFS®, ChFC®?
I don't know
7. Does the advisor hold any other certifications or designations?
I don't know
8. Does the advisor have a clean compliance record at FINRA and/or the SEC?
I don't know
9. Did the advisor practice full disclosure and provide documentation for the information you need to make the right decisions when you select, monitor, and retain advisors?
I don't know
10. Does the advisor provide wealth management services or sell investment products? (Check one)
Provides wealth management services
Sells investment products
Sells insurance products
Sells investment & insurance products
Provides wealth management services and sells investment or insurance products
I don't know
 ... al-advisor
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Re: Solutions, Self Defense and Best Practices

Postby admin » Fri Sep 12, 2014 1:18 am ... pId3M/edit

The best minds is "best investment practices" released a WHITE PAPER today, titled, "Key Principles for Fiduciary Best Practices".

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It is a clear and simple, six page summary of the better thinking out there for investment customers, the investment profession, and is indicative of the type of investment relationship you wish for your family and your life savings. All else that poses as "investment advice" can run the risk of serious harm to you today. See Stan's GRAND DECEPTION topic in this same forum at viewtopic.php?f=1&t=193 for a look at how simple it is to cheat investors out of about half their life;s work in the name of investment "advice".

Key Principles for Fiduciary Best Practices and an Emerging Profession
Knut A. Rostad *

Fiduciary law is complex in its nuances and structures; fiduciary principles are not so complex. Instead they reflect the wisdom of Emerson, who noted, “Nothing is more simple than greatness; indeed, to be simple is to be great.” So it is with principles on which fiduciary best practices and an emerging advisory profession must rest. This paper notes the attributes of character, suggests relevant operating principles or premises for best practices based on these attributes, why these principles matter, and how they starkly differ from principles underlying common brokerage sales practices aggressively advocated by brokerage lobbyists. Throughout, the simplicity of these principles and their meaning to investors stand out.

Character is The Distinguishing Mark of a Profession

In a widely referenced article on professionalism, Richard B. Wagner in "To Think ... Like a CFP,” writes
"The classic professions are law, medicine, and theology. Additional ones might include journalism, teaching, nursing and architecture. All have the characteristics of working with ambiguity... a profession entails the conviction of divine influence, an altruistic motive, a strong ethical context, intense academic preparation, an esoteric common body of knowledge, and an educational curriculum." 1

Crafting and upholding standards, codes of conduct and best practices is inherently challenging. Dr. Robert Kennedy, Professor, Ethics and Business Law, at the University of St. Thomas, notes the
"distinguishing mark of a true professional is the ability to make sound judgments in conditions of uncertainty," and requires, not just knowledge and experience but also character and moral integrity. “A person of moral integrity needs also to develop two other character traits: courage and discipline."

* Knut A Rostad is president of the Institute for the Fiduciary Standard. The Institute is a non profit that exists to advance the fiduciary standard through research, education and advocacy. For more information see
September 10, 2014

The fiduciary obligations of loyalty, due care and utmost good faith are well outlined through common law and regulatory rulemaking and guidance. Advice must solely advance a client's best interest -- as opposed to the interest of the advisor, his firm or a third party.

Essential criteria for a profession of fiduciary advice naturally fall into two broad categories. The “technical” criteria such as education, knowledge and experience, which are most evident in the duty of due care. “Ethical” criteria such as character, honesty and transparency and clear communications, are most evident in the duties of loyalty and utmost good faith. While both sets of criteria are essential, they are not evenly addressed today. Advisors and their membership organizations put far greater emphasis on “technical” criteria over “ethical” criteria. 3

“Ethical” criteria are revealed in how advisors view and address conflicts, the reasonableness and transparency of fees and expenses, and communications that are clear, complete, and truthful.
Caveat Emptor is the Distinguishing Mark of Brokerage Sales Practices

While character is the hallmark of a profession, caveat emptor, the Latin term for “Let the buyer beware,” is the hallmark of brokerage sales practices. Explicitly, all brokers say they do right by their customers – and many brokers do operate at or near the fiduciary standard investor expect. Implicitly, however, a very different picture emerges as industry lobbyists vigorously defend and protect conflicted advice, opaque fees and expenses, and misleading or incomplete communications.

In a July 14, 2011 letter to the Securities and Exchange Commission, the Securities Industry Financial Markets Association (SIFMA) sets out its views as to what it believes SIFMA’s brokerage standard should comprise (the SIFMA standard) when brokers are supposed to “put investors’ interests first.” 4 Here, SIFMA advocates for brokers continuing to “offer products and services that are available today” (essentially negating a “due care” duty), chides the SEC for prioritizing avoiding – as opposed to disclosing – conflicts of interest, sets out weak disclosure protocols (which are more efficient for the broker dealer but less effective for the investor), limits and confuses when the SIFMA standard applies such that during a single broker / customer discussion, a facts / circumstances exploration may be required to determine if the SIFMA standard applies at all, and, finally, permits the SIFMA standard to be restricted contractually. (There is no mention in the letter, however, of controlling investment expenses, prohibiting certain products or practices, strictly avoiding any conflicts, or requiring informed client written consent in any specific instance.) 5

These brokerage sales practices can be harmful to investors and the aggressive lobbying efforts to expand them underscore why the principles underlying fiduciary ‘Best Practices’ matter. Perhaps far more than is realized. Fiduciary principles appear “obvious,” “simple” and “uncontroversial.” And they are if you agree with them; they are not if you don’t. Brokerage lobbyists don’t; in fact they not only disagree, they dispute them at their core. They strenuously assert that fiduciary practices harm investors. This is why restating what these principles mean is important.

Conflicts of Interest

Conflicts of interest have long been acknowledged as undermining independent and objective advice. As noted above,
the Advisers Act was literally conceived from the concerns of investors’ confusing advisors with product salesperson, or “so-called “tipster” organizations who disguised themselves as legitimate advisory organizations.”

Conflicts are deemed to be incentives, favors, benefits, or compensation which can reasonably be expected to impair objective advice. Compensation arrangements which directly alter payment levels to advisors or brokers depending on the investment strategy or product recommendations are well- known conflicts. Many conflicts are less obvious. At its heart, loyalty is being sensitive to, and competent at identifying and avoiding conflicts. With conflicts, a fiduciary advisor’s conduct and practices should reflect these principles and premises:

• Objectivity is essential. It is the essence of the meaning of advice.
• Conflicts are bad; they can gut objectivity. In 2012, Carlo V. di Flora, then SEC Director, Office of Compliance and Inspections spoke on conflicts, “Conflicts of interest can be thought of as the viruses that threaten the organization’ s wellbeing...and if not eliminated or neutralized even the simplest virus is a mortal threat to the body...” 7
• Neutralizing conflicts is needed. For unavoidable material conflicts, the harms from the conflict should be neutralized.
• Disclosure’s impact is mixed – sometimes good, sometimes ineffective, sometimes harmful. While disclosure is at the heart of securities regulation, disclosure often does not work. Yale Management Professor Daylian Cain notes conflicts are corrosive and disclosure just can’t be trusted. "Investors usually do not sufficiently heed even the briefest, bluntest and clearest disclosure warnings of conflicts." 8
• Disclosure must be in writing to be effective.
• Disclosure along with instruction is better. Though simple disclosure is often ineffective, it can be improved with personalized counseling. The SEC notes, “No hard and fast rule can be set down as to an appropriate method for registrant to disclose... The method and extent of disclosure depends upon the particular client involved. The investor who is not familiar with the practices of the securities business requires more extensive explanation than the informed investor. The explanation must be such, however, that the particular client is clearly advised and understands before the completion of each transaction..” 9
• Disclosure with informed client consent is even better yet. The standard is “informed, intelligent, and independent” written consent.
• Best’ always means ‘best’. Regardless of consent, the fiduciary advisor must show the transaction is fair and reasonable and consistent with the client’s best interest.
• A voiding conflicts is best of all. Reasonableness and Transparency
of Fees and Expenses

Research suggests that
investors often understand little about advisers, brokers and their services and what they pay for investment services
. The 2008 Rand Report (Rand) reports "In fact, focus group participants acknowledged uncertainty about the fees they pay for their investments and survey participants also indicate confusion about fees." 25% of respondents who reported using an advisor or broker also reported they pay $0 for these services. 10 In a 2011 AARP study of 401 (k) plan partici- pants, as 71% of participants reported they did not pay any fees, while 23% said they do pay fees. 11

Jack Waymire, CEO of the Paladin Registry surveyed his members on the issue of transparency regarding, “credentials, ethics, compensation, investment expenses, and potential conflicts of interest.” Waymire states the survey shows
“advisors want to selectively disclose the information they provide to investors.” 86% said they did not practice voluntary transparency or documentation;” 14% voluntarily discuss their method of compensation when marketing their services
. 12
A separate Paladin survey of 421 investors 11 found that 81% said they were “most concerned” about the various fees and commissions deducted from their accounts; 86% said they were “very confused” about the different expenses; only 19% said they were “comfortable” comparing fees and expenses of different advisors.

Bank of America Merrill Lynch wealth unit chief, John Thiel, according to an industry news report, recently spoke about the need to “create transparency around fees.” According to the report, Thiel said investors need three sets of information: an overall picture of what they pay in fees and commissions, specific information about what they are charged for transactions, and annual summaries. 14

With fees and expenses, a fiduciary advisor’s conduct and practices should reflect certain principles, which include the following:
• Investor knowledge of fees and expenses is essential. Prospective clients should be fully apprised of the total estimated fees and expenses. Client’s should be fully apprised of the total actual fees and expenses and fees paid by any third party to the advisor.
Investor misconceptions about fees / expenses are harmful; when intentionally perpetrated by misleading or false communications, these communications constitute fraud.

Communicate Clearly, Completely and Truthfully
Warren Buffett is acclaimed world wide for his investment prowess; he is almost as well known as a champion of clear and candid communications to shareholders. Buffett associates successful investing with clear communications, "If you can't write something clearly it’s because you haven't thought it through clearly enough." In Berkshire Hathaway's "Owners Manual," one of eleven principles reads,
"We will be candid in our reporting to you, emphasizing the pluses and minuses important in appraising business value (as) ... the CEO who misleads others in public may eventually mislead himself in private."

Buffett's shareholder letters testify to his commitment to writing clearly and candidly. He personally writes several drafts of the letter over several months. Averaging about 12,000 words it is 'the longest shareholder letter in corporate America. Buffett explains he writes to be interesting and understood by his sisters, who are not experts in finance or business. They expect 'honest and accurate information' and 'straight answers to predictable questions.'

Buffett has criticized public company documents, "Too often I have been unable to decipher just what is being said or, worse yet, had to conclude that nothing is being said." Buffett continues, ... "In some cases, moreover, I suspect, that a less than scrupulous issuer doesn't want us to understand a subject it feels legally obliged to touch upon."

Unfortunately, many investment communications fall far short of the “Buffett Rule.” The worst shortfalls range from examples of communications that seem to clearly mislead investors to instances where certain facts are omitted and an incomplete or inaccurate conclusion may be easily drawn. For example: a Government Accountability Office research report found numerous brokerage firms falsely advertising "free" IRAs 16; a North American Securities Administrators’ Association report found widely varying and inconsistent disclosures of brokers' fees and expenses 17; and
a New York district judge scolded Goldman Sachs for arguing in a legal pleading that its statement to put investors interests first, one of its business principles, was mere "puffery"
. 18

The judicial scolding of Goldman Sachs regarding “puffery” raises an issue with brokers and fiduciary advice: how do brokers communicate their services to investors. Rutgers professor Arthur Laby argues that the strongest rationale for holding brokers to the fiduciary standard is that
brokerages have advertised “trusted advice” services in explicit language and titles for decades, and have created “reasonable expectations” that brokers are fiduciaries.

Georgetown professors Angel and McCabe extend this argument noting that
brokers should offer advice in the best interest of the client, because “To do otherwise is fraud because then the service delivered would not be what the customer thinks she or he is buying.”
In many instances, however, investment professionals fall short by simply failing to translate industry jargon into plain language. Writing expert, Dr. Deborah S. Bosley, reports how a study by her firm, The Plain Language Group, of the design of key documents that TIAA CREF sent to retirement plan beneficiaries was associated with a myriad of language problems. The study concluded that the lack of “plain language” left people confused, undermined their trust in the organization and their confidence in pursuing financial goals. 21 TIAA-CREF and The Plain Language Group designed an easy to understand document that achieved the goal of communicating clearly with complete transparency.

When communicating, orally or in writing, a fiduciary advisor’s conduct and practices should reflect certain principles, including the following:
• Plain language and investor understanding is essential. Plain language builds trust and confidence in the advisor and reinforces the importance of investing. The SEC’s revised ADV Part II reflects this understanding.
• Unclear language is a serious problem. Language that is incomplete or unclear is harmful. Language that is designed to fulfill legal obligations, and be only understood by attorneys but incomprehensible to investors, is worse yet.
• False statements disguised as “puffery” is very bad, considered fraud by some experts.
Summary and Conclusion

The "ethical" criteria of fiduciary duties are the core elements of what we think of as character. They provide the foundation for best practices regarding conflicts, fee/expense transparency and commu- nications. These principles represent established doctrine, embedded in centuries of law. They are noteworthy for their simplicity. For their elementary truths.

At their core, these principles reflect how we think about and seek to render objective advice; how we view our professional duty and serve our clients' best interests. Next to avoiding conflicts, applying the ‘Buffet Rule’ may best distinguish fiduciaries. We strive to make sure clients know the risks they take, the services we deliver and the fees they pay. It is what fiduciary advisors do and what so emphatically distinguishes advice from sales.

These principles contrast starkly with many underlying principles upholding brokerage sales practices - - practices which are either legally permissible or, have become de facto, permissible. How stark? Explicitly, all brokers say they do right by their customers – and many brokers do so and operate at or near the fiduciary standard investor expect. Implicitly, however, a very different picture emerges as
industry lobbyists vigorously defend and protect conflicted advice, opaque fees and expenses, and misleading or incomplete or incomprehensible communications. This is “the tone from the top” which is clear and unequivocal.

Examples are ubiquitous, so much so often they go unnoted. To mention a few: Rarely, if ever, do brokerage lobbyists criticize or discourage conflicted advice, (one lobbyist has actually suggested conflicted advice is good for investors. 22); urge short and simple written agreements or informed client consent agreements; or urge fee and expense disclosure (John Thiel’s remarks a noteworthy exception), or truthfully say what “suitability” truly means, in law; i.e.: “Investors, watch out.”

These examples suggest a theme: Brokerage sales is notoriously conflict-filled and conducted in an opacity that helps perpetuate many investors’ well documented and harmful misconceptions about brokerage services and fees.

This theme appears to parallel what investors believe, fairly or not, about big financial institutions. So it is not surprising that pundits, observers and investors from across the political spectrum view Wall Street bad behavior and public distrust of the capital markets and financial institutions with dismay, if not disgust. 23 What to do? Robert Fronk, of the Harris Reputation Quotient Survey may have it right, "One thing the public is screaming loud and clear about financial services is: be more sincere, be more honest, be more transparent." 24

Fiduciary advisers need to recognize they alone, among all industry participants, can reclaim their proud heritage, unabashedly embrace the ethical principles of fiduciary duties and restate in the public square in the clearest terms possible what it means to be a fiduciary adviser. They alone can rededicate themselves to this mission, because they understand their true value to investors. They must lead a campaign to defend and protect this heritage – for today and to pass on to the next generation.

1. ... cuments/FP A%20Journal%20Februa ry%202004%20%20Best%20of%2025%20Years_%20To%20Think%20Like%20a%20CFP.pdf
2. "Ethics, Courage and Self-Discipline." In Enron and World Finance, edited by P. H. Dembinski, et. al. Palgrave-Macmillan, 2006.
3. Many membership industry organizations discuss "soft" issues in general terms, but do not consistently identify specific best practices that are required (not recommended) for accreditation.
5. For a detailed discussion of these points, see the Institute letter to the SEC replying to the SIFMA letter. ... Fiduciary- Standard-Letter-to-SEC.pdf
6. For an excellent discussion of the differences between investment advisers and broker-dealers, see Arthur Laby's "Selling Advice and Creating Expectations: Why Brokers Should be Fiduciaries," For origins of Advisers Act, see pages 720, 721.
7. ... _nt-2O4_IU
8. Cain, ... lease1.pdf
9. In The Matter of Arlene Hughes at page 11.
10. “Investor and Industry Perspectives on Investment Advisers and Broker-Dealers,” ... report.pdf Rand set out to provide the SEC with “a factual description of the current state of the investment advisory and brokerage industries” and determine whether investors understand the differences between the relationships between investors and brokers or advisors.
11. ... ess-11.pdf
12. ... financial-
13. ibid.
14. ... thiel-fee- transparency-key-to-restoring-trust
15. Buffett’s Bites, The Essential Investors Guide to Warren Buffetts Shareholder Letters, J. Rittenhouse, p. 22--26, 170.
17. ... stionable-

18. ... ichman+v.+
goldman+sachs+group+inc&hl=en&as_sdt=20000006&as_vis=1 , footnote 8, page 15.

GOLDMAN SACHS customer abuse case found here as well:
19. See note 4.
20. "Ethical Standards for Stockbrokers: Fiduciary or Suitability?" p. 17.
21. "From Chaos to Clarity: Overcoming Negative Emotional Responses Financial Information," Deborah Bosley.
22. See SIFMA letter to SEC, July 2011.
23. For a discussion of the public’s negative views of Wall Street, see: ... bout-wall- street-banks-business-and-free-enterprise_083339502447.pdf
24. ... y%20Report% 20FINAL.pdf

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Re: Solutions, Self Defense and Best Practices

Postby admin » Thu Sep 11, 2014 9:00 am



Wednesday, September 10, 2014

‘Best Practices’ Move Forward With
Council of Advisors, NAPFA Strategic Alliance,
Brian Hamburger as General Counsel to the Best Practices Board

New Whitepaper Offers Key Principles for Best Practices

Washington DC -- The Institute for the Fiduciary Standard today announced the release of a whitepaper on ‘Best Practice’ Principles, appointment of the Council of Advisors and General Council to assist the Best Practices Board, and a new alliance with the National Association of Personal Financial Advisors (NAPFA) to help advance best practices

Institute president, Knut A. Rostad, stated "The ‘Best Practices’ initiative has struck a cord among many leaders in the industry. The time is right for fiduciary advisers to restate in the clearest possible terms in the public square what ‘Best Practices’ mean and why they matter to investors.”

New Whitepaper Highlights Key Principles, Best Practices to Follow

The Institute released a whitepaper, “Key Principles for Fiduciary Best Practices and An Emerging Profession.”

Rostad stated, “The paper sets out the principles on which ‘Best Practices’ should be based and how they sharply differ from the principles on which brokerage sales practices are based. These are not “differences” of nuance or differences of degree. They are fundamentally opposing views on the very foundation of the Advisers Act of 1940, and views on fiduciary principles expressed by the most respected economic thinkers and jurists of our time, from Adam Smith to Justice Harland Fiske Stone.”

Council of Advisors, Headed by Bogle, Frankel to Advise Best Practices Board

Vanguard Founder John C. (Jack) Bogle and Boston University School of Law professor Tamar Frankel will also advise the Best Practices Board and lead a Council of Advisors. Council members will offer insights on best practices and professionalism.

The Council of Advisors is comprised of professional recognized in their fields and includes: Steven G. Blum, Deborah S. Bosley, Robert G. Kennedy, Woodrow W. Leake, and Edward J. Waitzer. (See roster, below.)

NAPFA joins Institute for the Fiduciary Standard to Advance
Fiduciary Advisers Best Practices

The Institute for the Fiduciary Standard also announced a new relationship with the National Association of Personal Financial Advisors (NAPFA) to advance ‘Best Practices’

Rostad noted, “NAPFA is the industry’s most prominent membership organization singularly focused on fee-only fiduciary advice. NAPFA’s active participation, along with the participation of other groups, is welcome and is important.”

As Geoffrey Brown, NAPFA CEO, stated “Our strategic partnership with the Institute of the Fiduciary Standard is consistent with NAPFA’s goal of advancing fiduciary principles. We are pleased to combine our outreach efforts and thought leadership, to advance our shared aim of establishing fiduciary best practices. Our partnership represents one of the necessary step towards closing current gaps in consumer protection and education. “

Brian Hamburger, CEO of Market Counsel, to Serve as General Counsel to Best Practices Board

“The Institute welcomes Brian Hamburger, CEO of Market Counsel, to serve the Best Practices Board as General Counsel. Hamburger is widely respected as a SEC compliance expert and relentless champion of independent fiduciary advisers,” Rostad said.

Hamburger said, “It is an honor to be asked to serve as General Counsel to this esteemed board. The Best Practices Board has an ambitious goal in advancing the profession of investment advice. While so many firms focus on regulatory compliance as a minimum threshold, I know that best firms want standards to aspire to."

Best Practices Board to Meet In Washington, Brief Reporters September 15

The Best Practices Board members will meet in Washington September 15 and brief reporters on their work. (See…) Best Practices Board members are recognized and respected industry practitioners:

Clark Blackman, CFA, CPA/PFS, AIF, Alpha Wealth Strategies
Bryan D. Beatty, CFP ®, AIF ®, Egan, Berger & Weiner LLC
Christopher W. Cannon, CFA, Firstrust
Gregory Curtis, Greycourt & Co, Inc.
William C. Prewitt, M.S., CFP ® Charleston Financial Advisors, LLC
Knut A. Rostad, MBA, AIF®, Institute for the Fiduciary Standard

Best Practices to Reflect “The Highest Standard Under the Law”

The fiduciary standard has been called “the highest standard under the law.” The best practices will incorporate broad fiduciary duties in accordance with common law, statute, regulatory opinions, and the Advisers Act of 1940. The best practices will also reflect the high aspirations for the fiduciary standard expressed in the landmark Supreme Court decision, SEC vs Capital Gains Research.
The starting point for the Best Practices Board deliberations is the Institute’s paper, Six Core Fiduciary Duties for Financial Advisors.

The Best Practices Board seeks to complete its work by year’s end, and will put the best practices out for public comment. The best practices will be followed by plans to accredit and validate practitioners who meet them.

Institute for the Fiduciary Standard

The Institute for the Fiduciary Standard is a non-profit organization formed in Virginia to benefit investors and society by advancing fiduciary principles through research, education and advocacy. For more information:

For more information, contact Knut A Rostad at 703-821-6616 x 429.
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Re: Solutions, Self Defense and Best Practices

Postby admin » Mon Aug 25, 2014 4:24 pm

I am giving cudo's (and my helpinghand award) to CIBC for this policy shown below:


Elimination of the ability of their commission sales "advisors" to steer clients into the highest commission choice of products:

Mutual Funds and Investment Funds With Deferred Sales Charge – Back end Load and Low Load Options

Regulators continue to focus on the suitability of compensation and fee structures applicable to mutual funds and other investment funds. Their primary concern is that the fee structure chosen for the client must be clearly suitable given the personal circumstances of the client and the various fee structures available to the client.

The Investment Advisor (“IA”) must always be able to demonstrate that the fee structure is suitable for the client. Where a deferred sales charge (DSC) option is to be used and several load options are available for the particular fund, the client must be placed into the load option that provides the greatest economic benefit to the client, regardless of the level of compensation or commissions to the IA. For example, if a fund offers a low load option and a back end load option, and no other differences exist between the two options (for example, different management fees charged to fund) the low load option must always be selected for the client.

The CIBC Wood Gundy Advising and Trading Policy Section 3.7.2 Mutual Funds and Investment Funds Suitability of Fee Structures explains the firm’s policy in detail. In keeping with the firm’s policy, effective January 15, 2014, CIBC Wood Gundy will only allow DSC funds to be purchased on a back end load option on an exception basis. In order to seek an exception, the IA must:

1) Prepare a valid business case as to why the purchase of the back end load option is appropriate, including a detailed description of the benefit(s) to the client and confirmation that the merits/costs associated with the different load options have been explained to the client and the client agrees with purchasing on the back end load basis. The IA should keep a note of this information in v8 or in the client file. A copy of an e-mail requesting the exception is sufficient.

2) The Branch Manager or Assistant Branch Manager must review the exception request, and if approved, maintain a record of the approval.

There will be no impact to existing back end load positions. IAs are reminded that switching from DSC to the corresponding front-end load version of the same fund is not permitted unless such switch provides an actual benefit to the client, e.g., lower management fee charged to the fund. This type of activity is only acceptable if the IA maintains a reasonable basis for the recommendation and there is a clear and measurable benefit to the client.

Should you have any questions, please contact Business Risk Advisory & Effectiveness.

Fonds communs de placement et fonds de placement à frais d’acquisition différés – Options avec frais reportés et options avec frais réduits
Les autorités de réglementation continuent de scruter la convenance des barèmes de rémunération et de frais applicables aux fonds communs et autres fonds de placement. Leurs principales préoccupations sont, d’une part, que le barème des frais choisi pour le client convienne clairement à la situation personnelle de celui-ci et, d’autre part, la diversité des barèmes de frais offerts aux clients.

Le conseiller en placement (« CP ») doit toujours être en mesure de démontrer que le barème de frais convient pour le client. Lorsqu’il faut utiliser une option avec frais d’acquisition différés et qu’un fonds comporte plusieurs options de frais, il convient de retenir pour le client l’option qui lui apporte le plus grand avantage économique, quel que soit le niveau de la rémunération ou des commissions pour le CP. Par exemple, si un fonds offre une option avec frais réduits et une option avec frais reportés, et qu’il n’existe aucune autre différence entre ces deux options (par exemple, des frais de gestion différents imputés au fonds), il faut toujours sélectionner l’option des frais réduits pour le client.

L’article 3.7.2 Fonds communs de placement et fonds de placement – Convenance des barèmes de frais du guide Politique sur la prestation de conseils et la négociation de CIBC Wood Gundy explique en détail la politique de la société. Conformément à la politique de la société, à partir du 15 janvier 2014, CIBC Wood Gundy n’autorisera l’achat de fonds à frais d’acquisition différés sur une option avec frais reportés qu’à titre exceptionnel. Pour obtenir une dérogation, le CP doit :

1) Préparer une analyse de cas détaillée justifiant pourquoi une option avec frais reportés serait appropriée, comprenant une description détaillée du ou des avantages pour le client et la confirmation que les avantages/coûts associés aux différentes options de frais ont été expliqués au client et que celui-ci donne son accord pour acheter les parts sur la base des frais reportés. Le CP doit conserver une note à ce sujet dans v8 ou dans le dossier du client. Une copie du courriel demandant la dérogation suffit.

2) Le directeur de succursale ou le directeur adjoint de succursale doit examiner la demande de dérogation, et en cas d’accord, garder un relevé de l’autorisation.

Les positions à frais reportés existantes ne seront pas affectées. Rappelons aux CP que le transfert d’un fonds à frais d’acquisition différés à la version correspondante du même fonds, mais à frais payés à l’acquisition n’est pas autorisé à moins que cet échange n’assure un avantage véritable au client, p. ex., imputation de frais de gestion moindres au fonds. Ce genre d’activité n’est acceptable que si le CP dispose d’une justification raisonnable de la recommandation et qu’il existe un avantage clair et mesurable pour le client.

Si vous avez des questions, n’hésitez pas à communiquer avec le Service de consultation et d’efficacité, Risque d’affaires.

CIBC Wood Gundy is a division of CIBC World Markets Inc., a subsidiary of CIBC and a Member of the Canadian Investor Protection Fund and Investment Industry Regulatory Organization of Canada.

CIBC Wood Gundy est une division de Marchés mondiaux CIBC inc., filiale de la Banque CIBC et membre du Fonds canadien de protection des épargnants et de l´Organisme canadien de réglementation du commerce des valeurs mobilières.
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Re: Solutions, Self Defense and Best Practices

Postby admin » Tue Jul 15, 2014 10:20 am

FINANCIAL DROWNING with the help of "Licensed" Investment Lifeguards


images.jpeg (6.31 KiB) Viewed 32523 times

Investment returns are like Oxygen to the lifeblood of your financial future.
 Investment dealers and advisors are in competition with you, for this Oxygen.  However the supply (of returns) is limited, so that every breath (percent) you get is a breath they do not get, and vice versa.  

It is a relationship where the more you gain, the less they have, and the more they gain, the less you have. This is NOT the right way to operate a healthy financial relationship.

Combine this with removal of fiduciary standards, "best interest" standards and the like, and you will find up to 90% of firms (in Canada) often use the LEAST suitable investment products (or commission paths), to gain the MOST of your investment returns for themselves.  

I worked with advisors who were given fake "vice president" titles for their success in violating the trust of their trusting clients.   (see Judge comments in Markarian v CIBC at para 263

They were called the best "relationship managers" in the business, and this simply meant they could svengali their way with more of their clients money.  Imagine the traits of the best cons and liars in the world:  “an aura of confidence, combined with an image of respectability”.   See how "suitability rule" can be used as a ruse to cheat you:

Now imagine how well they can succeed in the investment business, managing "you", and your trust in them.  Not managing your money, but managing YOU.
 YOU are the product that the “advisor” of today is managing.
(please view 1.5 minutes and 88 words from SEC Chairman Mary Jo White if terminology confuses:

That was the #1 job of the retail investment product seller, aka "advisor".    See “TD cutting brokers payout” in half if they don't "produce":

Investing in this manner (like most "advisor" relationships) is like trying to swim with 70 lbs of weight around your neck……

Now imagine that amount of performance drag on your investment efforts.

The non-fiduciary "advisor" of today is a commission salesperson who, if they wish to become a vice president, they may act like a 20 lb drag weight to your reinvestment returns………….the investment "dealer" is a corporation with less "humane" instincts than even the worst advisor, a tolerance to harm others without anxiety, and an absolute immunity from the effects of lying…….they are a 50 lb weight around your neck.

(Don't even ask about the "safety" of the regulatory system overseeing this industry. Just know this: 100% (each and every one) of Canadian regulators are paid by the investment industry, and those at the top are paid over $700,000)
(another 10 pounds of weight to add to your swimming efforts:)

SIMPLE SOLUTION #1 PLEASE discover if your investment "advisor" is legally obliged to only rescue and help you (fiduciary duty), or if they have the hidden "villain" loophole (suitability):


This short rant was inspired by reading a blog post by Steadyhand, a marketer of investment funds, who in my opinion, does an honest job, and follows some of the better professional practices I have seen.  Their blog article was prompted by an article in the Globe and Mail business section, which (business media) is another 20 pound weight……100lbs and counting….

SIMPLE SOLUTION #2 (find an honest, low cost provider of investment services who does not mind sharing their best practices publicly: Steadyhand blog article worth reading here: [url][/url]
Also posted as next flogg posting in this forum topic…..scroll down to view.

This article shared at , 44 topics focused on the systemic tricks of the investment trade.

the "Click here to view forums" is how to see the "home page" of all topics

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