Why working with a Stock Broker still sucks

In todays WSJ there was an article about how a Wall Street’s firm top producing brokers were being treated to an all expense paid junket to Maui. On arrival they were treated to “pillow gifts” such as Maui Jim sunglasses and GoPro cameras. These members of “The Chairman’s Club” are being rewarded for grossing the highest commissions at the firm. Gross is the appropriate term. What is not mentioned in this article is the cost of membership. This fee is paid by the clients. Their purchase of outrageously expensive and completely unnecessary Class A, B, and C mutual fund shares, Inappropriate Variable Annuities, and illiquid and dangerous private placement issues financed this “reward.”
While there was no report of Strippers and prepaid dates which were prevalent during pre-great recession times, give them time. It is inconceivable in this day and age of low cost index funds that people would even consider this highly conflicted business model. Any business that gives its employees these types of rewards for commission generation is all but guaranteeing a response that will be detrimental to their clients best interests. Never mind, these firms all have paid armies of Lobbyists that insure they don’t have to. Where are the client’s Maui Jims ??

This content, which contains security-related opinions and/or information, is provided for informational purposes only and should not be relied upon in any manner as professional advice, or an endorsement of any practices, products or services. There can be no guarantees or assurances that the views expressed here will be applicable for any particular facts or circumstances, and should not be relied upon in any manner. You should consult your own advisers as to legal, business, tax, and other related matters concerning any investment.

The commentary in this “post” (including any related blog, podcasts, videos, and social media) reflects the personal opinions, viewpoints, and analyses of the Ritholtz Wealth Management employees providing such comments, and should not be regarded the views of Ritholtz Wealth Management LLC. or its respective affiliates or as a description of advisory services provided by Ritholtz Wealth Management or performance returns of any Ritholtz Wealth Management Investments client.

References to any securities or digital assets, or performance data, are for illustrative purposes only and do not constitute an investment recommendation or offer to provide investment advisory services. Charts and graphs provided within are for informational purposes solely and should not be relied upon when making any investment decision. Past performance is not indicative of future results. The content speaks only as of the date indicated. Any projections, estimates, forecasts, targets, prospects, and/or opinions expressed in these materials are subject to change without notice and may differ or be contrary to opinions expressed by others.

Please see disclosures here.