Topic: How To Invest

What is Pat’s commentary for the week of October 12, 2016

Article Excerpt

Friends of mine who work as brokers sometimes say, “You must have an awful opinion of us, judging by the terrible things you say about brokers.” That’s a misconception. Brokers are human—some are people of high integrity, others less so. But I do have a low opinion of many of today’s investment products and services. The core of the problem is that the financial industry offers its salespeople incentives to give clients bad advice. A broker can sell his or her clients a wide variety of products and services that will bring the broker a wide range of fees and commissions, from high to low. As a rule, the more income a broker can earn from selling an investment, the poorer the match between the investment and the interests of the client. To put it another way, the higher the risk to the client, the higher the return to the…