Bribery or Cost of Doing Business?

[mikegj1]

What is the name of your state (only U.S. law)? NY

I am a Personal Financial Advisor in Manhattan, and I receive a commission of 1% of assets under management each year. I've noticed in this city, I am surrounded by rich people of all sort of talents. I recently thought of the idea to get in touch with the most powerful talent agents and managers in town, and offer them money for each big name client they refer to me. If they refer a client who gives me $1,000,000 to manage I write out a check to the manager for $10,000, which would put me in a position to break even for the year on that client. However, if I do my job right, and that client stays with me for more than one year I turn a huge profit.

It is perfectly legal for me to recommend a life insurance policy to one of my clients, because that policy pays me a bigger commission, even if that policy is not the best option for my client. Is it illegal for me to pay someone for referrals? It's not like I am incompetent, or anything, I graduated from NYU a little over a year ago, and I am a Certified Financial Planner. Plus actors are notorious for burning through money when they have it, and having nothing left over when their career's begin to cool off. They can use someone like me.

[Some Random Guy]

It is perfectly legal for me to recommend a life insurance policy to one of my clients, because that policy pays me a bigger commission, even if that policy is not the best option for my client.

First of all, you should be fired from whatever job you have.

As a Certified Financial Planner, you have a fiduciary duty to your clients. Since you just graduated from school and presumably recently got certified, you should remember that part of the course.

If you clients discovered you were fleecing them deliberately, they can sue you and whatever group you work for.

Secondly, yes actors are stupid, but most are starving and the successful ones generally don't give million dollar checks to people with no track record of performance.

[anteater]

Unless the CFP Board of Standards has relaxed its Code of Ethics substantially, your certification should be revoked. Call them and ask the question. And, while you are at it, ask what they think this of this little tidbit:

It is perfectly legal for me to recommend a life insurance policy to one of my clients, because that policy pays me a bigger commission, even if that policy is not the best option for my client.

I also suspect that your supervisory office will not look favorably upon this scheme.

And, if you try this, be sure to load up on your E&O. Sooner or later, you will be sued. Were you planning to include this on your disclosure?

You know, the CFP designation is meant to convey that you uphold certain professional standards. Not that you manged to pass a test. I realize that you are young and it is a cold, cruel world out there. But, if you are not willing to be a professional, then stop using the CFP mark.

[I_Got_Banned]

Originally Posted by mikegj1

What is the name of your state (only U.S. law)? NY

I am a Personal Financial Advisor in Manhattan, and I receive a commission of 1% of assets under management each year. I've noticed in this city, I am surrounded by rich people of all sort of talents. I recently thought of the idea to get in touch with the most powerful talent agents and managers in town, and offer them money for each big name client they refer to me. If they refer a client who gives me $1,000,000 to manage I write out a check to the manager for $10,000, which would put me in a position to break even for the year on that client. However, if I do my job right, and that client stays with me for more than one year I turn a huge profit.

It is perfectly legal for me to recommend a life insurance policy to one of my clients, because that policy pays me a bigger commission, even if that policy is not the best option for my client. Is it illegal for me to pay someone for referrals? It's not like I am incompetent, or anything, I graduated from NYU a little over a year ago, and I am a Certified Financial Planner. Plus actors are notorious for burning through money when they have it, and having nothing left over when their career's begin to cool off. They can use someone like me.

You pose a legitimate question (I think) and yet halfway through your explanation, you make the most idiotic, perfidious, sinister and unrelated statement, and you stated it so matter of factly.

Just goes to show you that a degree from NYU, a CFP certification, and the appropriate designations that I am sure you have from SEC, NASD, NYSE... etc. aren't worth the paper they are printed on.

Is it a wonder that the entire world is facing the financial crisis that it is?

Greed, trust, fiduciary duty and (in your case) stupidity do not mix... Not EVER. It's too bad that this board offers the anonymity that it does! Because you should be put out of business.