Stockbrokers and Broker Dealers

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PostPosted: Mon May 18, 2009 4:33 am   Post subject: Stockbrokers and Broker Dealers  

Are Broker-Dealers and Stockbrokers the same thing?



A broker-dealer is a company or other organization that trades securities for its own account or on behalf of its customers.

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PostPosted: Mon May 18, 2009 10:42 am   Post subject:   

Stockbrokers need to be an employee of a Broker/Dealer or they need to be an independent contractor of a broker/dealer.

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PostPosted: Mon May 18, 2009 11:16 am   Post subject:   

They don't call themselves "Stock Brokers" anymore.



They are now called "Registered Representatives" so you don't know you're dealing with a Stock Broker.



The term "Registered Representative" is part of the systemic FRAUD on Wall St.



They also will get their insurance license to be able to sell the infamous bloated pig with lipstick known as a Variable Annuity but THEY ARE NOT INSURANCE AGENTS. You can thank Bill Clinton and the Financial Services Modernization Act of 1999 for that one. In less than ten years these FRAUD MERCHANTS have almost collapsed the USA monetary system.



A "Registered Representative" wouldn't ~know~ risk managment if he/she/it had a mouth full of it and they have done great harm to American's life savings with risky investments that are not suitable by age and financial objective for the client.



Most all of these losers are now out of the business and GOOD RIDDANCE!



Go sell used cars as that's going to be where the action is over the next five (5) years while the auto industry restructures.



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PostPosted: Mon May 18, 2009 1:46 pm   Post subject:   

Gary, stock broker and registered representative are not synonymous terms. All stock brokers are registered representatives. All registered representatives are not stock brokers.



A stock broker must have a series 7. One can be a registered rep with a series 6. One who just has a series 6 can't sell stocks.



They are all registered representatives, but very few call themselves that. Most of them use the term financial advisor or something similar.



Most of them have their insurance license because it is smart on their part to be able to make money on insurance sales. They may not know what they are doing in terms of insurance sales, but like it or not, they are insurance agents.



There is nothing wrong with variable annuities. Like most financial products, they are appropriate or inappropriate based upon the situation.

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PostPosted: Mon May 18, 2009 8:08 pm   Post subject:   

Insurance Expert thank you for clearing things up.



I think you said registered representative is what stock brokers call themselves now and yes they are also insurance agents who really don't sell insurance EXCEPT for Variable Annuities.



Quote:
There is nothing wrong with variable annuities.


I strongly disagree.



Below is a typical Variable Annuity statement:





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PostPosted: Mon May 18, 2009 9:54 pm   Post subject:   

No, I didn't say that stock brokers call themselves registered representatives. I said that they are registered representatives. I've actually never heard a stock broker call himself that term.



Dorothy Stanley lost money on her variable annuity last year thus all variable annuities must be bad. The vast majority of people who bought homes within the last few years have lost money, thus home ownership must be bad. Most people who bought fixed indexed annuities and then needed their money within a few years, lost money, thus FIAs must be bad.



VAs make sense for many people. In fact, it may have made sense for Dorothy. If she couldn't afford that loss for the year, her money could have been in a guaranteed option and she wouldn't have lost a penny, and in fact, would have made money.

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PostPosted: Tue May 19, 2009 4:08 am   Post subject:   

Interesting turn on the thread thanks to both for the informative dialogue.



"Stockbrokers need to be an employee of a Broker/Dealer or they need to be an independent contractor of a broker/dealer."



Are Fininancial planners in the same boat? What is the difference with them? Is it the governance that is different? Hope you can clear up my confusion



Thanks

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PostPosted: Tue May 19, 2009 5:09 am   Post subject:   

Quote:
Most people who bought fixed indexed annuities and then needed their money within a few years, lost money, thus FIAs must be bad




Can you explain what you mean here?


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PostPosted: Tue May 19, 2009 8:28 am   Post subject:   

Quote:
Are Fininancial planners in the same boat?




Nope, the financial planner would plan out every financial details for you. They would devise the investments options, suggest you the coverage you need to carry in order to ensure the financial future of your family/dependants and so forth.



Stock brokers would restrict themselves with the dealing of stocks. They may also act on your behalf. However, they may make you suggestions about the best shares to buy but they normally wouldn't venture out to the other financial planning.



Hope that clarifies.



Thanks,

Rupert
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PostPosted: Tue May 19, 2009 8:37 am   Post subject:   

"Stock brokers would restrict themselves with the dealing of stocks"



As far as I know Stock brokers sold 16% of the market of Annuities in 2008.

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PostPosted: Tue May 19, 2009 8:45 am   Post subject:   

Razz Great topic darnardo1 and ripe for a good old fashion THREAD WAR! Evil or Very MadTwisted EvilWink



Insurance Expert wrote:

Quote:
No, I didn't say that stock brokers call themselves registered representatives. I said that they are registered representatives. I've actually never heard a stock broker call himself that term.


I understand.



So they call themselves "Financial Advisors" which is a generic term. Financial Planner is also a generic term.



But they are actually commissioned salemen of mutual funds, stocks, bonds, variable annuities and other financial products. Nothing wrong with that EXCEPT they are STOCK BROKERS as that term is understood by Mom & Pops across the kitchen table.



Quote:
Dorothy Stanley lost money on her variable annuity last year thus all variable annuities must be bad.


Correct. The statement posted above is "typical" of MOST ALL variable annuities. Variable Annuities VIOLATE the fundamental aspect of Safety of Principal inheirent in ALL annuities EXCEPT variable annuities.



Quote:
The vast majority of people who bought homes within the last few years have lost money, thus home ownership must be bad.


Homes and Annuities have nothing to do which each other. People lost money on homes over the past few years because they foolishly BORROWED double the money to pay for an overpriced house to begin with.



The homes didn't lose value, people paid too much and more than the house was ever worth to begin with.



Quote:
Most people who bought fixed indexed annuities and then needed their money within a few years, lost money, thus FIAs must be bad.


Annuity rhetoric.



You'd have to go out of your way to find any fixed annuity that doesn't have a 10% free withdrawal provision, waive surrender charges at death, waive surrender charges for nursing home confinment and waive surrender charges for terminal illness.



Quote:
VAs make sense for many people. In fact, it may have made sense for Dorothy. If she couldn't afford that loss for the year, her money could have been in a guaranteed option and she wouldn't have lost a penny, and in fact, would have made money.


That's nice to know, great information.

Too bad their Stock Broker, Registered Representative, Financial Advisor, Insurance Agent, Financial Planner didn't protect his client's money BEFORE they lost 39% of their life savings.


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PostPosted: Tue May 19, 2009 11:38 am   Post subject:   

Quote:
Interesting turn on the thread thanks to both for the informative dialogue.



"Stockbrokers need to be an employee of a Broker/Dealer or they need to be an independent contractor of a broker/dealer."



Are Fininancial planners in the same boat? What is the difference with them? Is it the governance that is different? Hope you can clear up my confusion



Thanks




We have to be careful with terminology. Part of the problem is that "financial planner" is really a term without meaning. Anyone who is making money by selling securities must be affiliated with a broker/dealer. Therefore, if the "financial planner" is selling securities, they must be affiliated. On the other hand, if the financial planner is not selling securities, they don't have to be affiliated with a broker/dealer.
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PostPosted: Tue May 19, 2009 11:49 am   Post subject:   

Quote:
Quote:

Most people who bought fixed indexed annuities and then needed their money within a few years, lost money, thus FIAs must be bad





Can you explain what you mean here?




It wasn't really a serious comment. Gary was using an example of a variable annuity losing money over the course of a year to paint VAs as a bad product.



I just pointed out that someone who needs their money after a short period of time would lose their money in a FIA. The reason that they would lose money is because of surrender charges.



Just like I don't think VAs are bad, I don't think that FIAs are bad. Like almost all financial products, they are either appropriate or inappropriate based upon the situation.
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PostPosted: Tue May 19, 2009 11:59 am   Post subject:   

Quote:
Nope, the financial planner would plan out every financial details for you. They would devise the investments options, suggest you the coverage you need to carry in order to ensure the financial future of your family/dependants and so forth.



Stock brokers would restrict themselves with the dealing of stocks. They may also act on your behalf. However, they may make you suggestions about the best shares to buy but they normally wouldn't venture out to the other financial planning.



Hope that clarifies.



Thanks,

Rupert




Rupert, a stock broker is anybody who has their Series 7 and is affiliated with a broker/dealer. A typical stock broker not only does not restrict themselves to the dealing with stocks, for most stock brokers, selling individual stocks is something that they don't do very much. I'm not atypical for a stock broker. Well less than 1% of my income comes from the buying and selling of stocks.
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PostPosted: Tue May 19, 2009 12:42 pm   Post subject:   

Quote:
I understand.



So they call themselves "Financial Advisors" which is a generic term. Financial Planner is also a generic term.



But they are actually commissioned salemen of mutual funds, stocks, bonds, variable annuities and other financial products. Nothing wrong with that EXCEPT they are STOCK BROKERS as that term is understood by Mom & Pops across the kitchen table.




You are correct that they are stock brokers (if they have their Series 7). They are certainly commissioned sales people.



However, I don't think that it is correct that they are looked upon as a STOCK BROKER as the term is understood by Mom & Pops. Look at Rupert's post. Most people think of a stock broker as someone who is trying to sell a stock. When you walk in on a meeting that Mom and Pops are having with their Smith Barney rep, Mom and Pops are going to say, "Let me introduce you to my financial advisor, George Jones." The reality will be that Mom and Pops may not own a single individual holding.



Quote:
Correct. The statement posted above is "typical" of MOST ALL variable annuities. Variable Annuities VIOLATE the fundamental aspect of Safety of Principal inheirent in ALL annuities EXCEPT variable annuities.




That doesn't make them bad products. It simply makes them inappropriate products for people who have safety of principal as a primary concern. (Some VA's can give safety of principal.)



Quote:
Homes and Annuities have nothing to do which each other. People lost money on homes over the past few years because they foolishly BORROWED double the money to pay for an overpriced house to begin with.



The homes didn't lose value, people paid too much and more than the house was ever worth to begin with.




I'm not trying to say that one has anything to do with the other. I'm trying to make the point that just because something can go up and down in value doesn't make it a bad thing. Borrowing money made their losses worse, but it didn't cause the loss. They would still have a loss even if they paid 100% cash. The value is what someone is willing to pay. If homes didn't lose value, stocks didn't lose value either. People just paid more than the stock was ever worth to begin with. That can't be a serious argument.



Quote:
Annuity rhetoric.



You'd have to go out of your way to find any fixed annuity that doesn't have a 10% free withdrawal provision, waive surrender charges at death, waive surrender charges for nursing home confinment and waive surrender charges for terminal illness.




I have no anti-annuity bias. You are correct about what you are posting. However, people still lose money because things do occur that cause them to take money out early.



Quote:
That's nice to know, great information.

Too bad their Stock Broker, Registered Representative, Financial Advisor, Insurance Agent, Financial Planner didn't protect his client's money BEFORE they lost 39% of their life savings.




Wait a second. First of all, if they didn't sell at that point, they haven't lost anything yet. Second of all, if the money wasn't invested in the variable annuity, it is possible that they wouldn't of had that money to lose in the first place. Finally, hindsite is twenty-twenty. Losing 39% in an investment isn't the same as losing 39% of one's life savings. If someone loses 39% off their life savings, the problem isn't in the investment vehicle. The problem is in having all of their life savings in a risky investment vehicle. A VA is an investment vehicle. The problem isn't in the vehicle, it is how the vehicle is used. A mustang convertible may be a fun car to drive on summer day, but I wouldn't strap my snow plow to it to clear 2 feet of snow from the driveway.
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