Stocks Go Down, Complaints Go Up
Investors Increasingly Aim Anger at Advisers, Brokers
By Elizabeth Razzi
Special to The Washington Post
Sunday, May 10, 2009
A lot of investors are blistering mad, not only about the sorry state of their portfolios but also about the investment advice they got on the way down. Their discontent drives a search for scapegoats — someone to blame for lost wealth. But it goes even deeper: Many investors are finding grounds to formally accuse their brokers and dealers of bad behavior. The backlash against the investment professionals is so sharp that in recognition of public outrage, the financial planning industry is asking Congress to create a national organization to regulate its ranks.
. . . The top complaint is breach of fiduciary duty, which requires a representative to act in the best interests of a client, with 946 cases filed through March. That’s followed by 758 cases of alleged misrepresentation and 631 cases claiming negligence.
She (Linda Fienberg) said that the tally tends to run in the opposite direction of the stock market: When stocks go down, complaints go up.
Sue the bastards, it’s the American way. Blameless ourselves, we can’t wait to set the blame elsewhere, like setting the dog on a noise in the night.
Nary a complaint during the feeding frenzy of up markets. As long as the fishing is good, who cares what bait is thrown in the water?
An industry concerned with ‘financial planning‘ that is so corrupt it seeks out a congressional policeman, isn’t likely to quell the fears of investors.
But it’s a whole lot more likely to look like the separation of wheat from chaff. To look good is everything today–and if those advisors need a tummy-tuck and planners require a chin-lift or boob-job to get the signature, so be it.
Which falls somewhat short of keeping the seas of too much capital from broaching the dike of conservative advice. It wasn’t that all investments were lemons, it’s that investors saw lemons out-performing oranges and reacted by a ‘what the hell, they’re both citrus’ investment strategy.
Hardly a basis for redress, but a confirmation of gullibility and greed over common sense.