Fiduciary Duty is NOT a Guarantee from Fraud

Discussion in 'Annuities Forum' started by DHK, Aug 25, 2017.

  1. DHK
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    DHK Guru

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    Here's yet another example (besides Madoff) of an IAR who ripped off his clients:

    https://www.onwallstreet.com/news/u...-defrauds-pro-athlete-and-his-wife-of-12m-sec

     
  2. walthamny
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    Well he charged a 75% commission. He should have set up his RIA as Fee only and charge a flat fee of 225K a year for 4 years to be DOL compliant.

    This one went further than most people. He impersonated a Charles Schwab employee so I hope he does jail time. If he was a Finra rep, he could have walked away with a 60 day suspension.

    After jail, he can get his local radio show as a financial entertainer and continue his scams.
     
  3. xrac
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    No amount of government regulation will ever prevent this type of thing. You cannot make a silk person out of a sow's ear and rules, regulations, and government oversight will not make a dishonest person honest. All the SEC rules do is generate more paper work, more government jobs, and make it harder for the average financial individual to do their job.
     
  4. pfg1
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    I have to wonder when I read these type articles... when is enough $ enough? Or what makes it not enough that you have to resort to that?

    To me, having a client with that type of $... obviously if he gave them the fee rate he said, he'd still make damn good $, he'd most likely have a long term client, and would and potentially get solid referrals from them. Moron.
     
  5. VolAgent
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    It all goes back to greed and keeping up with the Joneses.

    I almost don't want to say it because I fear the political talk that will follow...

    But this is the same mentality that caused Hilary to say they were broke after Bill left office as President. To them, they were flat broke. To the average American, they were rich.

    People tend to evaluate their position subjectively, by what they see around them. This is the same danger that social media poses. Most people post the best parts of their life, so you think everyone is buying new cars, eating at fancy restaurants, taking nice vacations, etc. You don't realize all the mundane BS they go through like everyone else. The time they had to scrimp to buy new shoes, repair the car, etc.
     
  6. pfg1
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    Yeah, I hear ya. Social media - while it has its good parts, is a huge problem in today's society. I see it with the kids - it can be consuming. Just walk through any store (or anywhere people are) and watch how many kids are snap-chatting.
    And Facebook... I call it FAKEbook. I know many folks that post about how great life is...nothing but roses, their real lives are just like everyone else or many times - worse. They just try to compensate online. Its a joke really.

    I guess I could see that possibly happening in this business, but honestly I can't understand that mentality personally.
     
  7. VolAgent
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    It has always been happening. Why do you think life agents can't accept cash or checks payable to the agent/agency? Social media has just made it worse. Instead of comparing yourself to the family down the street, you can compare yourself to anyone in town or across the country.

    It happens on here too. Comments like, "I wouldn't get out of bed for $50,000 a year." "I want to make good money, $100,000 or more." This is completely clueless that $50,000 a year is just below the median household income across the US. So that means you are making more than most households, and that median is distorted by high income cities. I would say the vast majority of agents on this forum are from the South or Midwest with a fair number from Florida, California and New York. So $50,000 a year in the South or Midwest is great money.

    When people are greedy, they find a way to sate it. Some legally and ethically, some illegally and unethically.

    And I'm as guilty of it as anyone else. I see stuff on FB or what people post here and go, "Man that is awesome, wish it was me." But then I remind myself, I am doing vastly better than most of America and most agents. And at the end of the day, no one pays my bills but me. Which is why I try to avoid any topic of how much someone makes or how much I make.
     
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