Big Banks Flushing Your Money Down the Toilet

Big Banks Are Flushing Your Wealth Down the Toilet: Here’s How

Wells Fargo, Edward Jones, and Morgan Stanley. What do they all have in common? In the past month they have all been involved in some pretty shady activity. They have done things that are completely contrary to what’s in the best of interest of clients.

The biggest and most recent example of this is Wells Fargo. In case you haven’t heard, Wells Fargo employees, in an attempt to hit internal sales quotas, opened millions of phony accounts for clients. This allowed those Wells Fargo sales people to hit goals and receive bonuses. They were rewarded for breaking the law.

Wells Fargo responded by firing 5,300 employees (yes, it was that widespread!) and by firing the Executive that headed the “phony account” department. They were also fined $185 million by the Consumer Finance Protection Bureau (CFPB).

A month before this story broke, this now fired Executive, was touted by the Wells Fargo CEO as being the “standard-bearer” for the bank. To make things even worse this “standard-bearer” who was fired is leaving with a huge pay day of $124.6 million! This is insane!

I (Brett) worked for ten years for an investor education company. At the time it was the biggest investor educational company in the industry. In 2009 this educational company was acquired by a major online brokerage. While I had a great time with great people during my ten years, I must say the last two years were hard. I encountered situations that made me sick. Not law-breaking situations like Wells Fargo, but certainly ethical situations.

You’ve got to understand that brokerages like this (Schwab, TD Ameritrade, Scottrade, E*TRADE, Edward Jones, etc.) have sales people. These sales people are rewarded for putting client assets in certain funds or portfolios or by selling clients certain products.

Think about it this way. If you’re in Sales and your boss says you can receive a $1,000 bonus by selling product A or a $2,000 bonus for selling product B, which one are you going to sell? If you’re telling yourself you would sell what’s best for the client, you’re living in a dream world (as evidenced by Wells Fargo). You’re going to sell the product that gets you the most money in your pocket. Period!

The brokerage that I worked for has a product like this (and probably many more that I’m not aware of). Sales people in branches receive a higher commission rate selling this canned product compared to something else. What do you think will happen, will they sell product A or product B?

When internal sales goals are to get assets into a certain product, and sales people are rewarded when they do, how do you think that plays out for clients?

I could go on and on and on, but won’t. Let me however leave you with one piece of advice.

Your money is important. It’s your future we are talking about here. It’s not a game of sales.

My advice- please find someone that is independent of these major financial institutions. Someone you trust that is not rewarded for selling you some product just to make money. Someone that is a Fiduciary, meaning they are legally responsible to put your interests above their own. Someone that listens to your situation and builds a portfolio for you.

There is a reason I left my comfortable job to partner with and build this great firm I’m now at. It was to help people in a way that I could never before do at a big publicly traded brokerage.

I urge you to review where and with whom your assets are currently held. Make sure that individual or that company has your best interest in mind. If not, look for someone that does.
Articles that accompany this topic:

5,300 Wells Fargo employees fired over 2 million phony accounts
Ex-NFL player, Mega Millions winner press $7.8M claims against Morgan Stanley
Edward Jones faces lawsuit over 401(k) fees

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