Saturday, March 5, 2016


A protester's sign on Wall Street days after the 2008 market collapse.

If someone told that there was system-wide misconduct within an industry wouldn't you want to avoid having to deal with that industry? For example, if a hospital or medical clinic had 7 percent of their medical staff reprimanded for misconduct would you want to become one of their patients? What if it were 20 percent?

I'm raising these questions because these are exactly the numbers we're seeing when it comes to misconduct among financial advisers (or brokers) in some of the biggest financial advising firms in America. The following is from Bloomberg News ...

A new working paper by business school professors at the University of Chicago and University of Minnesota found that 7 percent of financial advisers have been disciplined for misconduct that ranges from putting clients in unsuitable investments to trading on client accounts without permission ... some large, well-regarded firms have misconduct records that far exceed the average. Nearly 20 percent of financial advisers at Oppenheimer & Co., with more than 2,000 advisers counted in the study, have misconduct records, according to the new paper.

What's worse, as Barry Ritholtz points out, "bad brokers don't leave the business; they just move on to a different firm" - and pretty much do the same thing.

Below is a list of 10 firms whose financial advisers have the highest disciplinary rates for misconduct. Below this list we have the names of the firms who have the lowest number of disciplined advisers.



For more on this you can read the full Bloomberg piece by clicking here.

- Mark 

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