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 ??