The Financial Coach Show » The Cons of Wall Street

Mutual Fund Past Performance Monkey Business: BEWARE

Bryan Binkholder — Mon, 26 Jul 2010 23:25:41 +0000

Soon to be released study from the Journal of Empirical Legal Studies (Sept. 2010) shows that Mutual Fund Past Performance means nothing but is used to seduce and swindle investors. In this video and attached report, you will see exactly why looking at past performance of mutual funds is a cardinal sin (possible an unforgivable sin). The best part is they recommend the SEC require the following Disclosure on Mutual Funds:

‘Do not expect the fund’s quoted past performance to continue in the future. Studies show that mutual funds that have outperformed their peers in the past generally do not outperform them in the future. Strong past performance is often a matter of chance.’

Key components Empirical Study PDF (Key pages selected)

The 5 Star Wealth Manager Scam

Bryan Binkholder — Wed, 31 Mar 2010 03:04:40 +0000

Bryan Binkholder and Blue Ocean Portfolios have been announced as proud winners of the ‘5 Star Wealth Manager Award’ and were featured in St. Louis Magazine in the Month of March 2010. Unfortunately, this entire award is a scam designed to help Financial Salespeople win the trust and admiration of consumers. I was contacted by the company that does the ‘research’ and I audio taped all the conversations as they described how they selected winners. Based on the information given, I knew that it was statistically IMPOSSIBLE for somebody to have nominated me. Armed with my presumed beliefs, I contacted my clients inquiring of each if they had nominated me. As much as I was hoping that statistically maybe I was the 1 in 2 million, I found that no one had even received a nomination card (from what they could recall). When I asked the company for a copy of the nominations they received “from my clients”, they of course could “not release that information” to me. This company–Crescendo Marketing– conveniently has a ‘3rd Party’ that does the ‘research’ so it is extremely hands-off. Most likely this is done to protect them legally if and when someone like myself calls them on the carpet.

In order to show consumers the full extent of the scams that flood the investing industry (and to avoid accusations that I was suggesting it was a scam “only because I didn’t win”) I purposely accepted the award (see the PDF copy of the magazine). And for only a few thousand dollars I can tell the world that I’m a “5 Star Wealth Manager” award winner! (*see attachments below)

Always be aware of marketing awards, marketing materials or anything else that announces a firm or individual is ‘The Top of The Top!’ These ploys are common when it comes to trying to set yourself above others and provide a 3rd Party that says…. “Hey, this guy is good.” Notice on the St. Louis Magazine site they also do this for Realtors and Mortgage people. Notice there aren’t any 5 Star Awards for Attorneys? The reason is that attorneys must abide by a higher code of ethics that prevents them from being involved in a sham such as this one.

My comment and thought to ponder is this–If an advisor is spending $5,000 to $10,000 on this award to market it, they are either obviously doing it to ‘DUPE’ a consumer or they are so blind that they can’t see how much of an obvious scam this is to the industry and the consumer.

In either case, WHY WOULD YOU WANT THEM HANDLING YOUR MONEY???????

*Check out the attached ‘order form’ to see the options advisors/salespeople have to “show your expertise and service.” Remember, tell others and let them know that this is a 5 Star Scam!

5 Star Wealth Manager Sell Sheet

5 Star Wealth Manager– St. Louis Magazine Award Winners

Financial Coach Code of Ethics Pledge

Bryan Binkholder — Sun, 28 Mar 2010 20:59:28 +0000

Due to the recent news that Brokerage Firms have persuaded Congress to continue to allow their reps to act in their best interest and not clients, The Financial Coach and Blue Ocean Portfolios wants investors who listen or deal with our firm to know that we will always abide by the following rules. Before you do business with anyone, make sure they sign the same pledge or don’t do business with them!

1) I will always put the client’s best interest first — ahead of my own and that of my firm and its employees. As defined by federal law, I will act as a fiduciary.

2) When selecting investments, I will act as the client’s agent, seeking the best investments at the best prices at all times.

3) While neither I nor anyone can promise superior investment returns, I will provide impartial advice and act with skill, care, diligence and good judgment.

4) I will provide full and fair disclosure of all important facts, including my compensation from the providers of the products and services I offer, as well as all fees I pay to others on your behalf.

5) I will fully disclose and fairly manage, in the client’s favor, unavoidable conflicts.

Congress Rejects Bill To Force Stockbrokers/Advisors To Act In Clients Best Interest

Bryan Binkholder — Sun, 28 Feb 2010 21:50:58 +0000

Jason Zweig from the Wall Street Journal discusses how the Congress rejected the bill requiring stockbrokers and insurance agents to put consumers interest first. The only people giving independent advice conflict free are Registered Investment Advisors.

The “Experts” Stock Picks for 2010–Yeah Right

Bryan Binkholder — Fri, 08 Jan 2010 03:39:21 +0000

Experts are always telling us what stocks to buy and sell. For most investors, we view this as what John Bogle of Vanguard Funds called it, “Investtainment.”

There has been NO PROOF that stock pickers, market timers or analyst can accurately and predictably predict the market and achieve above average returns.

The best way to invest is to utilize low cost index and exchange traded funds while developing a portfolio that manages your risk comfort. Cost, risk, asset allocation/diversification and rebalancing are the only things you can control so learn the facts.

http://online.wsj.com/article/SB126126238767798771.html

Merrill Lynch, UBS, Morgan Stanley Paying Big Bucks For Reps

Bryan Binkholder — Mon, 16 Nov 2009 00:47:19 +0000

The big guys are paying 330% of a reps past 12 months commissions to ‘lure them over.’

http://www.investmentnews.com/apps/pbcs.dll/article?AID=/20091113/FREE/911139975/1094/INDaily01

Updated Story: The recruiting & bonus war continues. I wonder how this helps consumers when companies are ‘buying’ brokers to bring their block of business to the firm.

http://www.investmentnews.com/apps/pbcs.dll/article?AID=/20091115/REG/311159961/1094/INDaily01

Brokerages Should Prepare For A Fiduciary World (putting clients first)

Bryan Binkholder — Tue, 10 Nov 2009 12:48:06 +0000

Great ‘insider article’ describing how currently brokers and brokerages must act in a ’suitable world’ in which they just have to show that invest recommendations they made were suitable, although not necessarily the best for an investor. In addition, when it comes to special offerings, IPO’s and other specialty items that brokerages create or are heavily compensated to move (sell for a company), brokers do not have to inform the consumer about how much the firm is being paid to move the bonds or stock or mutual funds or whatever. Get armed and learn what a broker or Financial Advisor/Vice President (or First Vice President) of investments is really trying to sell you. This blog post by financial insiders reveals (through what it says between the lines) of what really goes on in the financial world and big brokerage houses.

http://blogs.wsj.com/financial-adviser/2009/11/06/brokerages-should-prepare-for-a-fiduciary-world/?mod=finadv

Worst First Quarter Ever! (Originally Posted 4.21.09)

Bryan Binkholder — Tue, 10 Nov 2009 03:59:33 +0000

The Market was killed in the first quarter of 2009 and most investors fled for the exits. The Financial Coach on April 21, 2009 related the worst first quarter and the Business Week article by bringing up the facts of how markets work and how as an investor you cannot fall prey to fear or greed. Check it out and understand how important it is to have a coach–not a financial salesperson! Note, the radio time noted has since changed since April.

Beware! Mutual Fund Dishonesty Is On The Rise

Bryan Binkholder — Tue, 10 Nov 2009 03:29:36 +0000

Originally Posted on April 16 2009.

The coach pounds away on the con game used by mutual fund firms and brokers to create the illusion of good performing funds. The video originally posted April 16, 2009 discussed the launch of Putnum’s Absolute Return Funds. Subsequent video’s show how Bryan was right on when he first called it.

Mutual Fund Incubator Funds: The Dirty Little Secret

Bryan Binkholder — Tue, 10 Nov 2009 03:23:06 +0000

What they DON’T tell you about mutual funds…