, Columnist
You Can't Afford Your Broker, at Any Price
The very reason that conflicts of interest are valuable enough to buy brokers homes in nice
suburbs is that most people erroneously believe that they already have a
fiduciary relationship with their brokers.Â
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The Department of Labor is moving toward making brokers and related jobs "fiduciaries" for their clients, the Wall Street Journal reports. Basically, they would have to offer advice with your best interest at heart, and should avoid conflicts of interest -- such as accepting fees to put people into low-return, high-fee investment vehicles. Think of your doctor or your lawyer: You're pretty glad they can't take money to steer you in a certain direction, aren't you?
But industry professionals warn that if they're given fiduciary status, a lot of their revenue will disappear, meaning that they will no longer be able to afford to service small accounts: