Broker receives incentives from providers for selling certain 3rd party products but does not disclose the payment to clients.
Broker fills client order from his firm’s inventory without checking alternative inventory and pricing.
Brokerage firm knowingly presents biased or incomplete research on an investment offering to persuade the client to buy an inferior product. (SEC has addressed this conflict).
Questions Wealth Owners Should Ask to Surface Conflicts
How many different firms do you work with when you recommend outside investment products?
How do you ensure best execution for client transactions (combination of lowest price and timing)?
What is the turnaround time to process and clear a transaction and what return will I receive on my cash in the interim?
How do fees and taxes alter the purported risk and return on the products you propose?
What are the limitations of the advice you are able to give me?
What percentage of my performance return is absorbed by fees and commissions?
On the fees and commissions your company is paid, what percent do you receive? And what percent goes to your employer?
What criteria do you use to determine who is offered limited investment opportunities?
How do you select the exchange rate for non-domestic transactions?