A few years back, I authored a blog about an unscrupulous broker at Wells Fargo who had managed to lose more than half of my then 86-year-old Aunt’s portfolio, by investing her money is stocks no 86-year-old should have been invested in.
It seemed the broker had never read the “Know Your Customer” rule.
It was a pretty emotional day for me when Aunt Gene said, “Robbie, I think I’ve lost all of my money.”
I visited the broker and asked for an explanation.
“Yes,” she said. “Let’s move your Aunt into a more conservative portfolio.”
She then told me perhaps we should put my Aunt into companies “like Bristol-Myers Squibb” because – she said – they were very diversified and not “just a pharmaceutical company.”
She obviously hadn’t done any homework before our meeting. Four years earlier, while I was on the Management Committee of BMS, we sold all our non-Pharma assets and became a pure-play BioPharma.
Needless to say, we filed a grievance with FINRA, and Wells Fargo settled with Aunt Gene. Part of the settlement was that I would take down my blog, which I did.
It was shocking to me last month when Aunt Gene, now 90, got a notice in the mail that the Wells Fargo broker in question had gone to court to get the FINRA ruling against her expunged, which the Court did.
This mail came right in the middle of a flurry of news about Wells Fargo’s bogus sales practices.
That’s true. But more importantly, this is a textbook case of botched culture management.
How many more Aunt Gene’s have had their savings stripped by Wells Fargo brokers…who wait a prescribed period of time, have their transgressions expunged…and then go on representing the firm’s clients?
Post by Bob Zito on 10/20/16