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Another dishonest broker thread

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  • Another dishonest broker thread

    Cautionary tale in the NY Times.  This is  why you shouldn't use a broker or give one trading authority:

    "Caring for Aging Parents,, With an Eye on the Broker Handling Their Savings"

     

    https://www.nytimes.com/2018/08/24/business/brokers-excessive-trading-retirement.html

  • #2
    Yeah, read that earlier. About two years ago, I insisted on a face meeting with my mother’s advisor. I made it clear that I was reasonably savvy and intended to watch the accounts closely (even though I do not have that permission ). The advisor had recently added a variable annuity to the account, and I told her that my mother did not need any more of this stuff.

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    • #3
      We see stories of these shenanigans weekly in the financial periodicals we receive - and those are just the ones big enough to make the news. I recently learned that an acquaintance in CA had lost his license for a Ponzi scheme - very involved in his church, commentator on CNBC, total shock.

      Your mom is lucky to have you watching over her account, Vagabond_MD. More doctors should take an interest in their parents’ finances. Of course, often the parents will resist, but it’s a good idea to offer.
      Our passion is protecting clients and others from predatory advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

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      • #4
        This actually is a huge problem. My father recently took a more active approach in my grandmother's finances. It requires extra time to pay the bills and watch all of the accounts, in addition to his own. However, there really is just no other option.

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        • #5
          Somebody has to look over statements very carefully.  I have always done this for myself.  No body cares about your money as much as you do.  Now in this situation the problem is the spouse who managed the money died and no one was initially keeping an eye on things.  By using Merrill Lynch, Morgan Stanley etc you will never encounter a Madoff situation where the whole portfolio goes missing but you can lose a lot of $$$ from churning.

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          • #6
            That's terrible and he still apparently works at JPM.

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            • #7
              The fact that the guy still works there tells you all you need to know to decide if this was a rogue agent or company policy.

              I read the story before bed last night and promptly had a very satisfying dream in which The Boondock Saints visited Manhattan.

               

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              • #8
                It's truly amazing how that guy still has a job. You know this wasn't his first or only time.

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                • #9


                  By using Merrill Lynch, Morgan Stanley etc you will never encounter a Madoff situation where the whole portfolio goes missing but you can lose a lot of $$$ from churning.
                  Click to expand...


                  And by using Vanguard or Fidelity and buying just index funds all by yourself you'll never have to worry about churning or Madoff!  

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                  • #10




                    The fact that the guy still works there tells you all you need to know to decide if this was a rogue agent or company policy.

                    I read the story before bed last night and promptly had a very satisfying dream in which The Boondock Saints visited Manhattan.

                     
                    Click to expand...


                    What makes me angry is the same bank got $25B in bailout in 2008-2009 when they should have gone bankrupt and now that they have used the bailout money and become viable, they screw the customers with tricks like these.

                    No wonder I squirm when I hear the words "Wealth Management Division" at a bank. It should be more appropriately called Wealth Transfer Division, where they find a way to transfer a large chunk of your money into their coffers, under the guise of managing it.

                    The best wealth management person is the one who you see every day when you look at the mirror when brushing your teeth. Yes, you might make some mistakes along the way and might not get first dibs on Google stock before it goes public but at the same time you won't be defrauded and the person who does it is still employed and gets handouts from our government. :x

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                    • #11
                      Another sad story, in a sea of them, that is entirely predictable given the financial incentives.

                      How come no comment from the local district attorney about possible criminal charges for unauthorized transactions (fraud)? That is still a crime, is it not?

                       

                       

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                      • #12
                        Kamban, while I understand your anger at the situation, your indictment of JPMorgan as having been bailed out to prevent bankruptcy in 2008 is inaccurate. Morgan was one of the few prudently managed banks in 2008, and only accepted TARP at the request (read arm twisted) of the U.S. Treasury to bring in all major banks so Treasury and the Fed could impose controls on the banking industry as a whole. Also, JPMorgan actually bailed out the government when it agreed to acquire Bear Sterns to prevent its bankruptcy. (Too bad no other bank was willing to do this for Lehman, but frankly there was so much public anger at the bailout of Bear Sterns the government decided to let Lehman fail to impose market discipline.)

                        None of that excuses the behavior described in the NYT article, which we can all agree was irresponsible at best and potentially fraudulent at worst.

                        (BTW, I have no compensated relationship with JPMorgan or any other bank.)

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