Brokers

Let's talk about Personal Finance again now that my obsession with College Basketball is coming to a halt until next year.  I know I'm once again stating the obvious, but YOU are the alone one who truely has your best financial interest in mind.  Your financial future should NOT be put into the hands of a BROKER.  A Broker is NOT a Financial Planner/Advisor.  A Broker's job is to SELL you something in order to serve his/her best interest.  As a matter of fact, the law states that a Broker MUST convey to his/her clients that his advice is not comprehensive and that his interests do not dovetail with his client's interest.  A Broker takes your money and will attempt to perform as many trades as he reasonably thinks he can get away with while charging you a fee for each transaction.  Churning is a common term used to describe this activity.  As much as the Brokerage firms try to communicate they have your best interest in mind, the truth is that they are working hard to line their own pockets.

Would a Broker lie to you?

Churning = An unethical practice employed by some brokers to increase their commissions by excessively trading in a client's account. This practice violates the NASD Fair Practice Rules. It is also referred to as "churn and burn", "twisting" and "overtrading". --- www.dictionary.com

Check out the Devil's Derivative Dictionary definition of churning.