A new poll shows that nearly 60% of 4,000 investors who responded to a recent poll said getting scammed is their top fear when dealing with investment advisers. (Why investors fear their advisers – Investment News, 11/11/2010) Is it any wonder?
Daniel Sparks, the former head of Goldman’s mortgage department, freely admitted in Senate testimony that their obligation was to act in their own best interest, not those of their clients. The clients of Goldman Sachs are among the largest and most sophisticated investors. If Goldman doesn’t feel any compunction to act in the best interest of their clients, why should less sophisticated investors feel any safer with advisers occupying lower tiers? (see Capital Offense) Advisers have a lot of work going forward to convince clients to trust them.
Top six reasons why affluent clients dump their advisers (Investment News, 11/10/2010)