I am an attorney and an investor. Yet, I must say that each chapter of 'Brokerage Fraud' brought new information and insight that is invaluable.
Readers of this book will find it informative, entertaining, and at times quite humorous.
This book will also arm you with enough information to make intelligent decisions about your money and with whom to place it.
You might even want to send this book to your current broker!
Frank E. Needham
The book explains that yes brokers are concerned about making you money, but they are more concered about making money off of you first.
The book explains how investment firms pressure their
stock brokers (aka financial analysts, money managers)
into creating as many "hidden" charges off your account as possible.
One big think the book points out is to watch for excessive
trading and the "hidden" cost of spreads and mark ups and mark downs.
One really good point was about the use of margin.
Most brokers do not explain to their clients the costs and
risks associated with the use of magin( borrowing money to buy
more stocks.)
One hidden cost of margin involves Flat Fee accounts where the money you borrow (and pay a good rate of intrest on) increases
the amount of assets in you flat fee acount, so you pay that
1 or 2% flat fee on the margin too.
Another key point in the book is ask you broker to tell you
what all you expenses total to as a percent of your assets.
You may be suprised how much they reall charge you.
You may not be so happy with your broker when you realize, yes
they made you a 15% return this year, but the market average(at same risk at you assets) returned 25% for the year.
And your broker only got your broker did not have you invested
in those assets that would have given you higher return becuasse
he got a bigger commission ( or hidden costs) on the assets that made you less money.
Many many games revealed about your "honest" broker.
The book has a little fluff so it could be a bit shorter, but the book is full of the many tricks your broker maybe using on you.
So for starters:
Stop your broker from usng high risk high commision product
(lke futures).
Stop your broker from using margin ( borrowed money).
Stop your borker from trading too much with too little reutrn.
Books gives a current and accurate picture of brokers,
on Jan 13,2004 a story on the front of the NY Times and
the Wall Street Journal stated Morgan Stanley was finded
for getting kick backs from sell certain mutual funds.
And in Sept 2003 Morgan Stanley was fined for holding
contests to see who sold the most of Morgan Stanley Products.