Written by North Capital Administrator

What Does a Conflict of Interest Look Like?

We have often written about the significant conflicts of interest that pervade the investment “advice” business.  Entrenched companies have lobbied hard against a fiduciary rule becoming the standard for investment advice in the U.S.:  attempting to minimizing the magnitude of conflicts that exist,  claiming that small investors would be harmed by eliminating commission-based “advisory products” (which is like saying that chemo is a bad treatment for cancer because it causes nausea), and creating false equivalencies (like fee-only advisors have conflicts too because they have an incentive to gather assets at all cost).   The annuity business, where insurance meets investment and retail commissions can be measured in the tens of thousands of dollars, is particularly abusive to anyone who needs real advice and counsel.   So it  is always amusing to me — if tragic — when a regulator, politician, or journalist calls out the industry with specific, odious examples of these conflicts, as Sen. Warren did recently.