Wall Street’s Darkest Secret By Jack Waymire At Isnare.com Ezine Articles

Wall Street needs a massive distribution system (650,000 strong) to market the thousands of financial and insurance products that it sells to investors. At the same time, it needs a low cost distribution system that maximizes companies’ profits and share prices.

The easiest way to see the impact of the need for cheap distribution is the extraordinarily low standards that Wall Street has established for financial advisors:

• Minimum education requirements: None, not even a high school diploma
• Minimum experience requirements: None, not even a day
• Minimum age: 18
• Disclosure requirements for credentials: None
• Disclosure requirements for compliance record: None
• Criminal record: Convicted criminals can obtain licenses as long as the crime wasn’t securities related
• Licensing requirements: An easy examination that requires very little study
• Method of compensation: 85% are paid straight commissions

These are the people who want to plan your future and invest your assets. No wonder there are so many headlines that document abuses. Most investors are usually shocked when they see the low standards. In fact, they are so shocked many can’t believe it’s true.

The unfortunate reality is most investors assumed financial advisors had the same standards as other professionals, for example CPAs and attorneys. What they didn’t know is the other professions are driven by an “advice” culture, while the financial services industry is driven by a “sales” culture. The difference is like night and day.

So why keep the low standards a secret? The answer is winning control of your money. Would you knowingly turn your IRA assets over to an advisor who had no formal education or experience? Of course not and Wall Street knows that so it withholds the information from you. That way Wall Street companies can add thousands of new advisors every year and they can start “selling” the same day they receive their licenses. New advisors feed the industry’s need for a massive distribution system and they are cheap, which maximizes profit.

So how do they keep low standards a secret? Wall Street has had decades to develop and refine a strategy that’s based on lobbyist activities and advertising. For example, Wall Street companies spend more than $300 million per year on lobbyists whose primary role is to make sure new legislation favors Wall Street and not investors. That’s why there are no mandatory disclosure requirements. Then they spend millions or billions of dollars on advertising and public relations that sells an image of competence and trustworthiness. They know most investors buy what they see and hear.

What you can about it? You can’t change an industry that’s more than willing to put its interests ahead of yours. All you can do is learn to protect your own interests and that means learning to avoid lower quality advisors and select competent, ethical professionals. You can obtain the objective information you need by going to www.paladinregistry.com / Tips-4-Investors and reading the free tutorials. No registration is required to access the content on this website.

Published At: Isnare Free Articles Directory http://www.isnare.com
Permanent Link: http://www.isnare.com/?aid=49345&ca=Finances

Important Notice DISCLAIMER: All information, content, and data in this article are sole opinions and/or findings of the individual user or organization that registered and submitted this article at Isnare.com without any fee. The article is strictly for educational or entertainment purposes only and should not be used in any way, implemented or applied without consultation from a professional. We at Isnare.com do not, in anyway, contribute or include our own findings, facts and opinions in any articles presented in this site. Publishing this article does not constitute Isnare.com's support or sponsorship for this article. Isnare.com is an article publishing service. Please read our Terms of Service for more information.