Comments on: When brokers aren’t followed http://blogs.reuters.com/felix-salmon/2010/10/12/when-brokers-arent-followed/ A slice of lime in the soda Sun, 26 Oct 2014 19:05:02 +0000 hourly 1 http://wordpress.org/?v=4.2.5 By: bkmacd http://blogs.reuters.com/felix-salmon/2010/10/12/when-brokers-arent-followed/comment-page-1/#comment-19284 Tue, 12 Oct 2010 16:35:50 +0000 http://blogs.reuters.com/felix-salmon/?p=5739#comment-19284 A few snippets from working in the industry:

Clients, in general, have no idea that UBS has tax issues. How they form their perspectives on reputation of brands is a haphazard amalgamation of marketing, popular editorials, and exceptionally personal experiences.

Clients will abandon a relationship of 15 years when a broker jumps ship because they like going into the (same) branch to deposit checks. Client decisions on brokers are idiosyncratic and have little to do with performance or firm.

Clients have no idea how to tell if their broker gave them bad advice. They know if their broker didn’t call them or make them feel like they were getting good advice, but most statements and available data provided by the brokers’ firms to clients is just enough to make clients feel like they know what is happening, but no where near enough to make a decent comparison.

Clients want to have a broker that is smarter than everybody else. In fact, half of what they are paying for is to be told that their broker is smarter than everyone else (this applies both to stock pickers, mutual fund pickers, and passive managers [“listen, I’m so smart that we’re not even going to play this beat the market game”]).

The (broker) human touch is valuable (full disclosure: was a broker, talkin’ my book). Hard to say whether it is more valuable to blow up your e*trade account yourself (in double leveraged etfs!) or have a broker blow up your account for you. Surely some brokerage house has the data to do it, but like they’re going to give it to me…

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By: tombrakke http://blogs.reuters.com/felix-salmon/2010/10/12/when-brokers-arent-followed/comment-page-1/#comment-19276 Tue, 12 Oct 2010 12:35:13 +0000 http://blogs.reuters.com/felix-salmon/?p=5739#comment-19276 URL for my previous comment: http://researchpuzzle.com/blog/2009/02/2 5/the-mysterious-waffle/

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By: tombrakke http://blogs.reuters.com/felix-salmon/2010/10/12/when-brokers-arent-followed/comment-page-1/#comment-19275 Tue, 12 Oct 2010 12:34:12 +0000 http://blogs.reuters.com/felix-salmon/?p=5739#comment-19275 Hopefully clients are starting to wise up and the use of the mysterious waffle will fade away.

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