AP – hot off the presses this morning - VP Biden is going to announce proposed regulations to protect workers from conflicts of interest on the part of financial advisers. The proposals reportedly will include: a) basing investment advice on objective computer models certified by independent experts and b) restrain advisers from self dealing by referring workers into funds from which they receive a commission.
My take: If this weren’t so laughable it’d be traffic. First, I suppose these are the same certified computer models that missed the crisis to begin with and which failed to protect investors to the tune of more than $15 trillion that’s been vaporized. And, second, receiving commissions from sales is part of the process. Wall Street has never been in the advice business and has, since its very founding, been there to sell stuff. Brokers are no different from appliance salesmen in that regard.
What Washington needs to do is clamp down on Wall Street and align their interests with investors rather than allowing them to smile while betting against them as is the case today. This proposal is yet more evidence that Washington not only doesn’t understand the game, but either cannot or will not take on the Street.
About Keith Fitz-Gerald
