The NY Times published a report this week that suggest that JPMorgan Chase used its brokers to sell its own financial products even though there were better performing or cheaper options available to their customers. In the case of at least one offering, the bank exaggerated the returns of what it was selling in its marketing material.
Apparently, the bank encouraged these types of investments to improve its own financial situation at the expense of its customers. By encouraging investments in its own funds and products, the bank secured a stable source of funds which contributed fees to the bank’s bottom line. For example, the bank has been charging 1.6 percent of assets in its Chase Strategic Portfolio while a typical investment adviser might charge something closer to 1 percent of assets as a fee for managing those assets.
One has to question the objectivity of brokers that are pushing products based upon the interests of their employer and not those of the customers that are obligated to service. to say that the bank put their brokers in a terrible position would be an understatement.
To read the entire NY Times article follow this link: Former Brokers Say JPMorgan Favored Selling Bank’s Own Funds Over Others
Once again this article highlights the need for customers to thoroughly investigate their broker and examine any potential conflicts that may influence that broker. One should also examine alternative investment ideas before agreeing to hire a stock broker or investment adviser.
The Securities Arbitration lawyers at Penzien & McBride, PLLC are always ready to assist clients with evaluating losses that customers believe may have been caused by their stock brokers or financial advisers. We can also assist clients with examining the records of any potential brokers or investment advisers. If you, or someone you know, have suffered losses because of recommendations or suggestions made by their stock brokers or financial advisers contact us today at (586) 690-4400.
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