Investment Adviser ComplianceCompliance staffers have a tough job and risk personal liability when firms misbehave

The Financial Industry Regulatory Authority recently announced that “culture, conflicts of interest and ethics” remain a priority of its brokerage examinations this year. But do you really think it is possible to enforce strength of character in an industry where the primary motivator is greed?

Look, I know it is magic to see clients retire without financial worries or watch their children graduate from college debt free, all because you put their interests first and gave them sound investment advice through the years. But come on. Nobody becomes a financial adviser to make the world a better place.

For many, the big draw is money, the game, the adrenaline rush that come from risky market calls that prove right. Wealth management attracts people who relish the never-ending hunt for clients and thrive on a compensation model in which fees and commissions remove all caps on what they can make.

Just sayin’.

Many investment professionals acknowledge the inherent conflicts of interest. They scrutinize fees, ignore the sales agendas of their employers and filter products through their personal code of ethics. In the process, they create real value for their clients and build practices that survive whatever bear markets come their way.

Others unabashedly hawk the securities that sprout from corporate petri dishes, deluding themselves that products with 7% to 9% front-end commissions are really in the best interests of their clients.

Read Norb’s full article on The Wall Street Journal.