31 May Are Your Finances Under Stealth Attack?

The other day I was reading a story about stealth military aircraft.  As you know, they employ technology designed to evade detection by both light and radar.

The article got me thinking about a stealth tactic I see being used by brokerage firms and insurance companies to slip under our radar.

We investors have begun to move away from getting our investment advice from salespeople. Instead, we’re gravitating more and more toward sources of advice presumed to be more objective.  Enter what I would term ‘stealth brokerage.’

This involves a brokerage firm setting up shop beneath the cloak of respectability of a local bank or financial planning firm.  We’ve got one bank right here in the Upper Valley who proclaims in their newspaper and magazine adds that, “people come to us because they want a planner and not a broker.” In reality, the bank’s employees are actually registered representatives of LPL Financial Investment Services.

Yes, LPL Financial, the brokerage firm who was just fined $5.3 million by the Commonwealth of Massachusetts for selling risky and illiquid investments to unqualified investors.  LPL Financial, the brokerage firm described by the New York Times as having been “penalized for selling complex investments to unsophisticated investors, for speculative trading in customer accounts, and, in a few cases, for outright stealing from clients.”

With that kind of press you can’t blame them for hiding behind a bank.

This article I was reading about stealth aircraft focused upon the shooting down of a stealth fighter jet over Serbia back in March of 1999.  It seems a Serbian anti-aircraft battery Commander recently divulged to Western media how they did it.  He wouldn’t go into detail, but he did offer that they had used “a little innovation” to update their 1960’s-vintage surface to air missile system.  They somehow read electromagnetic waves to detect the plane and shoot it down.

Now I figure that if military stealth technology can be undermined by a sixty-year-old military system and a little ingenuity, than surely we can combat stealth strategies being employed by retail brokers to dupe us into buying their wares.

One simple yet effective technique is to apply a filter in our search for advice that eliminates salespeople from consideration at the outset.  Just such a filter is available through the National Association of Personal Financial Advisors.  You can learn about it by visiting our website at  www.WealthConservatory.com.

And, if you want to employ stealth technology yourself, to turn the table and evade detection of you by these firms, I hear wrapping your wallet in tinfoil can be effective.