"I'm working for you!"

Step right up for 3-card Monte...
User avatar
Frank Hoffman
Poster
Posts: 361
Joined: Fri Feb 22, 2013 6:25 pm
Custom Title: Quando Omni Flunkus Moritati
Location: Fort Wayne, Indiana, USA
Contact:

"I'm working for you!"

Postby Frank Hoffman » Wed Feb 24, 2016 2:00 am

http://www.thefiscaltimes.com/Columns/2 ... ment-Money

Financial lobbyists seem to be doing all they can to keep a proposed "fiduciary rule" from being enacted, which would legally require advisers who offer individual investment advice for a fee to act in their clients’ best interest.
Strange, is it not, that we might expect the people we are paying to act in our interest?

"Opponents say the complex rule will significantly increase brokers' liability risk and regulatory costs, making advice more expensive — thereby pricing people with smaller accounts out of the advice market." http://www.investmentnews.com/article/2 ... ves-at-omb

What strikes me the most about this is the same thing that caught my attention with the Bernie Madoff scandal; that the feeder funds which pulled investors to him made much more money from the transactions than he did; which is likely why none of them looked too deeply into why his returns were so much higher than everyone else. The real trick if you are going to keep a scam going is to make sure all of your accomplices are paid very, very well.

Matthew Ellard
Real Skeptic
Posts: 26750
Joined: Fri Jun 13, 2008 3:31 am

Re: "I'm working for you!"

Postby Matthew Ellard » Wed Feb 24, 2016 3:08 am

Financial advice is a complex topic and is highly regulated in Australia.

I agree with you that "Fiduciary duty" is a murky area of the commonlaw. That's why in Australia the government legislated all these laws on disclosure of advisor's fees in detail, including potential fees on future earnings and penalties for changing advisors or managed portfolios.

When I started accounting, one of the big multi national accounting firms was Arthur Anderson. Arthur Anderson expanded into both financial advice (fiduciary duty) business representation ( "agency") and "friendly audits". If it was a small accounting firm doing one of these things, then that would be OK. However to do all these things, with the employees "swapping hats" while looking after clients, is just a big "no no". It did unravel and Arthur Anderson closed after the Enron scandal.

The Arthur Anderson auditors signed off on "off balance sheet" investments that were actually massive liabilities, in a scheme Arthur Anderson came up with as business advisor. An auditor's duty is to the stakeholders and not the company being audited.

https://en.wikipedia.org/wiki/Arthur_Andersen


Frank Hoffman wrote:What strikes me the most about this is the same thing that caught my attention with the Bernie Madoff scandal; that the feeder funds which pulled investors to him made much more money from the transactions than he did; which is likely why none of them looked too deeply into why his returns were so much higher than everyone else. The real trick if you are going to keep a scam going is to make sure all of your accomplices are paid very, very well.
It's disgusting isn't it. In the 80's and 90's I accepted kickbacks as an accountant for sending clients to superannuation funds, that I never checked myself. The government banned this and accountants started screaming. However, I took the view that I was time charging the client for giving advice and thus an additional kickback was simply "indirect theft".

Our mothers were right. If you don't do anything wrong, you can go to sleep at night and things will do better in the long run.

User avatar
ElectricMonk
Persistent Poster
Posts: 3272
Joined: Thu Mar 26, 2015 6:21 pm
Custom Title: His Beatitude

Re: "I'm working for you!"

Postby ElectricMonk » Wed Feb 24, 2016 10:13 am

This is indeed a serious issue: for financial advisers.
Financial advisers need rather sophisticated programs for their analysis, but more and more those programs are available to and usable by everyone.
Just like lawyers and many other professions, financial advisers are becoming obsolete ( except for the very best, of course, who's price will always be very high).
I've come up with a set of rules that describe our reactions to technologies:
Spoiler:
1. Anything that is in the world when you’re born is normal and ordinary and is just a natural part of the way the world works.
2. Anything that's invented between when you’re fifteen and thirty-five is new and exciting and revolutionary and you can probably get a career in it.
3. Anything invented after you're thirty-five is against the natural order of things.
- Douglas Adams

User avatar
Gord
Real Skeptic
Posts: 29411
Joined: Wed Apr 29, 2009 2:44 am
Custom Title: Silent Ork
Location: Transcona

Re: "I'm working for you!"

Postby Gord » Wed Feb 24, 2016 6:42 pm

ElectricMonk wrote:Just like lawyers and many other professions, financial advisers are becoming obsolete--

Wait...what?? Lawyers are becoming obsolete?!

Where do you live, I want to move there immediately.
"Knowledge grows through infinite timelessness" -- the random fictional Deepak Chopra quote site
"You are also taking my words out of context." -- Justin
"Nullius in verba" -- The Royal Society ["take nobody's word for it"]
#ANDAMOVIE

User avatar
ElectricMonk
Persistent Poster
Posts: 3272
Joined: Thu Mar 26, 2015 6:21 pm
Custom Title: His Beatitude

Re: "I'm working for you!"

Postby ElectricMonk » Thu Feb 25, 2016 9:17 am

let me clarify: most of the jobs a lawyer does today can be outsourced or automated, especially the very tedious and time-consuming ones. That meany that the billable hours a lawyer can charge are plummeting, at least for those customers clever enough to find lawyers operating at the technological state of the art.
Studying to become a lawyer today is a very bad idea.

So you are right, lawyers are not becoming obsolete,but they will be less and less in demand for doing things that you do not need a bar exam for.
I've come up with a set of rules that describe our reactions to technologies:
Spoiler:
1. Anything that is in the world when you’re born is normal and ordinary and is just a natural part of the way the world works.
2. Anything that's invented between when you’re fifteen and thirty-five is new and exciting and revolutionary and you can probably get a career in it.
3. Anything invented after you're thirty-five is against the natural order of things.
- Douglas Adams

bobbo_the_Pragmatist
Has No Life
Posts: 11005
Joined: Wed Sep 09, 2015 9:39 am

Re: "I'm working for you!"

Postby bobbo_the_Pragmatist » Thu Feb 25, 2016 4:17 pm

Matthew Ellard wrote:[I agree with you that "Fiduciary duty" is a murky area of the commonlaw.

I think of it as not murky at all.... just not followed or enforced due to the general corruption by money and greed that is rampant in our new guilded age.

Obamas biggest crime: not prosecuting Wallstreet, not breaking up the Big Banks, continuing the influence of Wallstreet in his administration as Clinton has promised to do as well.

Corrupt from start to finish. Not murky at all.

TAX FRICKEN STOCK TRADES. Easy, simple. Its been done before to great effect.

....................... we do it to ourselves.
Real Name: bobbo the existential pragmatic evangelical anti-theist and Class Warrior.
Asking: What is the most good for the most people?
Sample Issue: Should the Feds provide all babies with free diapers?


Return to “Scams and Con Games”

Who is online

Users browsing this forum: No registered users and 2 guests