Brokers are hired-guns trained to sell securities. Research studies show that over 80% of all mutual funds are “sold” by commissioned brokers who will do whatever’s necessary to make the sale: withhold information and when necessary lie, cheat and commit unethical, often illegal acts to make their five percent commissions. For example, the New York Attorney General got settlements against Morgan Stanley for unethical brokerage deals that revealed how, behind the scenes, CEO Phil Purcell changed the venerable House of Morgan into a bunch of hack brokers using all kinds of unethical incentives.
Ever try to get rid of one of those pesky cold calls from a commissioned broker? That is, other than spewing expletives as you slam down the phone, screaming that you’re on the national-do-not-call list? Here’s an even tougher question: How’d you get rid of a real nice broker, who’s also a family friend, someone you hired several years ago—before you knew better—who you now realize has been pocketing big commissions and fees every year while your account’s losing big bucks during a bear/recession? (More)