Aug 20th, 2015
Attention News Editor,
For Immediate release:
Investment industry whistleblower reveals how professional deception is harming North American investors. Alleges industry-regulator connections that allow client abuse.
Lethbridge, Alberta, Aug 20th, 2015
Larry Elford, former investment broker and 20 year industry insider, is on a mission to protect investors from industry-insider tricks designed to harm their retirement investments.
Up to half of investor’s future retirement savings can be diverted by one’s “advisor”, to the advisor and their sponsoring dealer, with just 2% shortchanged from investment returns each year, over a lifetime of investing.
Research provided freely to the public at InvestorAdvocates.ca shows how this is done without the knowledge or informed consent of many investors. Beginning with a simple (yet cleverly hidden) fact that approximately 150,000 “advisors” in Canada, and 600,000 in the USA, do not carry the license or the duty of care to the client that they advertise and imply.
“Advisors”, dealers and regulators can thus often be found to be working too-closely together, whilst public interest protections are sometimes forgotten.
“Deception of the consumer goes contrary to rules, codes and policies of the investment industry, yet the industry seems able to get away with completely policing itself. The criminal code is rarely, if ever applied, even when it is violated. We are talking about an industry which has elevated itself to be above the law”. Larry Elford
This news release contains 8 pages:
Page 1 News Release
Page 2-3 Supporting article about testimony to US Congress last week, describing the issue well.
Pages 4-6 “To Deceive is to Defraud”
7 Steps "Advisors" Take To Abuse Unsuspecting Investors
A free-use article, with links to government registration sites in Canada and the USA to check your broker/”advisor’s” license or registration.
Page 7 A 585 word article, written by industry-expert Larry Elford which you have permission from InvestorAdvocates.ca to print without cost, if you feel that this information is newsworthy and in the interest of your readers.
Page 8 Contact infohttp://www.benefitspro.com/2015/08/14/w ... page_all=1
HEADLINE “Witness says brokers try to pass themselves off as fiduciaries”
Testimony details retiree horror stories during hearings on DOL fiduciary rule
AUG 14, 2015 | BY NICK THORNTON
At the heart of the Department of Labor’s effort to finalize a new rule requiring advisors to act as fiduciaries to most 401(k) plans and IRAs is the need to clarify which entities in the financial services world are actual fiduciaries, and which merely imply that they are.
That line has been blurred, argued Labor Secretary Thomas Perez, in testimony to Congress defending the Department’s effort to post a rule by the end of the Obama Administration, in spite of wide-ranging criticism from stakeholders, and a growing number of lawmakers, that the rule, as proposed, would have massive unintentional consequences for small workplace retirement accounts and IRAs.
One witness at this week’s public open meeting over the DOL’s proposal testified to the extent of how blurry the line between fiduciary and broker has become.
In his capacity as head of the Public Investors Arbitration Bar Association, a nonprofit association of attorneys that represents plaintiffs in securities arbitration hearings, Joseph Peiffer testified that brokerage firms routinely advertise themselves as fiduciaries when they clearly are not.
“One thing is clear,” Peiffer told a panel of DOL representatives. “Right now, the very same brokerage firms that advertise like fiduciaries routinely contest that they owe a fiduciary duty to their clients.”
In some of the most personal testimony offered in the four days of hearings at the DOL, Peiffer detailed several horror stories in his time representing more than 500 clients that he says were victims of conflicted advice.
“Almost every week, we see a retiree come into our office who has lost a substantial amount of his life savings,” said Peiffer.
“These retirees often break down in my office when I explain to them how their investment was lost to conflicted advice. I have had clients that ran out of money and had to rent a room from his ex-wife. I have had clients live with me because they couldn't afford the gas and lodging to stay at a protracted arbitration hearing. I have, unfortunately, even had clients attempt suicide,” he added.
Along with his testimony, Peiffer submitted a report he coauthored this year that compares the advertising claims with the arbitration stances made by nine of the country’s largest broker-dealer brands.
“Brokerage firms now engage in advertising that is clearly calculated to leave the false impression with investors that stockbrokers take the same fiduciary care as a doctor or a lawyer,” claims the report, which was co-authored by Christine Lazaro, director of the St. John’s School of Law securities arbitration clinic.
“But, while brokerage firms advertise as though they are trusted guardians of their clients’ best interests, they arbitrate any resulting disputes as though they are used car salesmen,” wrote the attorneys.
Their report claimed that Merrill Lynch, Fidelity Investments, Ameriprise, Wells Fargo, Morgan Stanley, Allstate Financial, UBS, Berthel Fisher, and Charles Schwab all advertise “in a fashion that is designed to lull investors into the belief that they are being offered the services of a fiduciary.”
Language in one piece of Fidelity marketing material actually claims the firm puts clients’ interests before their own, according to the study.
Allstate, a brand known for its “you’re in good hands” slogan, which the paper suggests is enough to dupe investors into thinking the firm has a legal obligation to put investors’ interests first, is currently fighting an arbitration claim brought by a couple who lost $400,000 because the broker put all of their savings in a non-diversified stock portfolio in 2007.
Allstate’s defense? It owed no fiduciary duty to the couple. The case is pending, according to the report.
One UBS ad features a voice presenting for a hypothetical broker saying she will not rest until her client “knows she comes first,” alleges the paper.
But when it is forced to defend its action in arbitration hearings, the firm routinely deploys the defense that brokers don’t owe fiduciary duties to their customers, says the report.
Merrill Lynch’s website claims to offer investors a financial strategy that “puts your needs and priorities front and center,” the report says.
Yet the firm, one of the first brokers to go on the public record in favor of a uniform fiduciary standard, “has refused to acknowledge it owes a fiduciary duty in arbitration when it breaches that duty to investors,” write Peiffer and Lazaro.
“Billions each year slip through the fingers of American investors because of the conflicted investment advice they receive,” they conclude.
“The SEC and DOL must take action to force brokerage firms to live up to the standard that they market to investors rather than the one brokerage firms argue when they have wronged those same investors.”
Re: Advisor Disguise/Deception
￼by admin » Tue Jul 28, 2015 7:46 pm
This article comes from a forum posing in http://www.investorAdvocates.ca
under the date and topic shown directly above.
click to enlarge this image of the US broker registration search page (web link found at bottom of this page)
The most important class action potential on the horizon today.
Commonly repeated forms of deception and intentional-misdirection, leads investment clients into situations of being financial abused BY so-called financial "advisors" and their sponsoring dealers
It is my belief that the commonality of the methods used to deceive/trick the public, combined with the well documented methods to unjustly enrich the broker/dealer, makes a case for class actions an easier obstacle to overcome than were the tobacco lawsuits of recent history….
Because billions of dollars are being cheated, shortchanged and siphoned away from trusting North American investors, into the hands of slick investment dealers and their "faked advisor" sales-force. videos at https://www.youtube.com/user/investorad ... ature=mhee
7 Steps "Advisors" Take To Abuse Unsuspecting Investors
1. Conceal true license from firm customers… (use non-regulated "titles" to imply something to clients other than what license/registration says)
2. To help conceal the legal duty (or lack of) from customers…(hide from them the difference between fiduciary (professional) duty and "suitability" (salesperson) duty
3. Misdirect customers into a false assumption that they have a professional with a valued duty of care to the client (the industry thus actually "helps" the trusting customer to be fooled by industry misdirection)
4. Hide the best advice, and best products from customers…profit from the greater rewards of selling substandard or higher-fee investments. (house brand funds, higher fee products)
5. Conceal conflicts of interest from client. (fees, commissions, deferred sales charges, dealer financial relationships/incentives)
6. Conceal the lack of agency duty/sole loyalty to client. (strongly imply professional levels of integrity and trust while delivering “self-regulating” salespersons. Misdirection and deception, to shortchange clients.)
7. Conceal from clients the difference between a SEC or Canadian registered "adviser" (fiduciary professional) and a self-titled, non-regulated "advisor" (salesperson/broker).
Virtually anyone referring to themselves as an "advisor". The correct legal license under US and Canadian Securities Acts is spelled "adviser", and Canadian regulators have confirmed that "advisor" spelled using "OR" is not of concern or oversight to them….(those who use it are thus free to use it in any way they choose, to deceive, and to misdirect consumers with it).
click to enlarge this image of the Canadian broker registration search page, (web link found at bottom of this page)
Keep reading the posts that follow in this forum topic if you would like to see more of the problem, and some solutions to protect your financial health from professional predation. Contact the author at email@example.com
if you are a victim of this type of deceptive practices by a financial professional. Class actions are being contemplated to bring accountability to an industry which promises "integrity and trust in every transaction they are involved in…."
The most important links which lend credibility to these arguments above is to simply go to either the BrokerCheck site with FINRA in the USA, or if in Canada, to the Canadian Securities Administrators registration search page:http://brokercheck.finra.org
Type in the name of your "advisor" here and find out that they are 9 times out of 10 registered as a "broker". (with a vastly different legal obligation to their client than is implied)http://www.securities-administrators.ca ... px?ID=1325
Nine out of ten "advisors" in Canada are hiding their true "dealing representative" registration.
Above article and images found at this link viewtopic.php?f=1&t=193&sid=4815c9cc9e0caaedccd4b376cfabdd36#p3847
To Deceive is to Defraud, 590 word article, free to use, edit as needed.
Larry Elford, of Lethbridge Alberta recently visited this paper with a story of financial trickery, and surprisingly, the trickery is not caused by scam artists or ponzi schemers. He describes a story of financial abuse by financial professionals.
Elford worked twenty years inside Canada’s largest brokerage firms, and left after suffering pressure to remain silent about industry misdirection and deception, that he stated was endemic within the industry.
He is not the only person speaking out. President Obama recently spoke to the AARP (American Association For Retired Persons) about the cost of such abuses to the American public, saying that White House studies put the harm to Americans at $17 billion per year. 3 min video here https://youtu.be/suNJh2uO18g
Elford describes it as being worse in Canada, where University of Toronto pension studies suggest the harm to Canadians could be one billion dollars each week, simply from mutual fund products alone. He cites and refers to the sources of this information at InvestorAdvocates.ca.
“I have been treated with the utmost respect and trust by my investment clients, and I owe no less to them in return. As a result of my opinion being opposed by some in the investment industry, I have decided to dedicate myself to informing the public of the ways they can be fooled by investment “advisors”. Elford
Elford also points to testimony in US Congress, where witnesses said that investment firms often promised trusted financial professionals, (fiduciaries, to use a centuries-old legal term) someone who has a “sole loyalty” to serve the client’s best interests...and then who all too often avoid delivering this highest level of duty, making huge gains for themselves by taking this shortcut,...the shortcut of deceiving clients with a promised professional, while delivering a commission hungry salesperson.
Elford claims it is equivalent to going to a Doctor for professional advice and treatment, only to find that there is now a new class of “doctor” who have dropped the “do no harm” oath...and done so while hiding this important fact from patients. His comments appear to be supported by those made to Congress. The article he refers to is also found at InvestorAdvocates.ca under the topic of “Advisor Disguise/Deception”.
A link is provided to allow investors to search the registration category of their broker/”advisor”. Elford says that there are nearly 3/4 million salespersons, or brokers in North America, who do not carry the fiduciary duty (the professional “do no harm” type of duty). This group typically calls themselves “advisors”, (note spelling of “advisor”) and advertises and markets themselves with the strong implication that they have duties of loyalty of a doctor or a lawyer. “Do not be fooled by nine out of ten advisors, who are hiding their most important secrets from the customer”. Elford provides a link to the 7 things a typical (non-fiduciary advisor) will hide from a customer. “In my opinion, these are definitive warning signs of a financial relationship based on deception and misdirection”
Elford is a former CFP, CIM, FCSI, Associate Portfolio Manager, and dedicates his time to “fighting for fairness” in an industry where the clients are told that fairness comes with the package,...if only that were so”.
This article, the articles etc, are posted at http://www.investoradvocates.ca
on Aug 17th, 2015 under the forum topic titled Advisor Disguise/Deception
Elford Contact info
Phone 403 393-4742 for media questions
Larry Elford, former CFP, CIM, FCSI, Associate Portfolio Manager
Facebook group for Fraud victims https://www.facebook.com/groups/albertafraud/
Facebook group for Fraud victims across Canada (Small Investors Protection Association of Canada, 1998)https://www.facebook.com/groups/240100382792373/
Video site for victims of investment malpractice http://www.youtube.com/user/investoradv ... ature=mheehttp://www.albertainvestorsprotection.comhttp://www.investoradvocates.ca