Uninvested: Understanding the Pitfalls of Wall St

Today we interview Bobby Monks and Justin Jaffy about their book, Uninvested and understanding the pitfalls of Wall Street.  Bobby Monks calls himself a “chronic entrepreneur” and as such, understands the dirty dealings happening on Wall Street and how they effect the average investor. Justin was new to the subject of finance but a journalist who wanted to know more.  Together with a third author, Bree LaCasse, they wrote Uninvested: How Wall Street Hijacks Your Money and How to Fight Back.  The Book  To the average person, investing seems like this complicated thing that no lay person can possibly understand. So they hand their money over to a “financial advisor.” The authors wanted to demystify investing for the average investor using simple language. They spent four years interviewing people like Barney Frank, Jack Bogle, Carl Icahn, mutual and hedge fund managers.  Financial Advisors  There are 450,000 people providing financial services in the United States and 90% of them are sales people. Just 10% are registered investment advisors. What’s wrong with that? When you go to a car dealership, 100% of the people are sales people.  The difference is that you know the person trying to sell you a car is a sales person. The standards for most of these advisers is low. They are under no obligation to put the best interests of their clients first and many of them don’t. Their priority is making money for the company they work for.  There is a lot of confusion among consumers about who is and who is not a sales person in the realm of financial advisors. Financial advice that is skewed by a conflict of interest costs investors $17 billion a year. If you were a paranoid person it might be enough to make you think the industry has been deliberately set up this way.  The Fiduciary Standard  The fiduciary standard was established as part of the Investment Advisors Act of 1940. Investment advisors are regulated and required to put client interests above their own. Investment brokers are only held to a standard of “suitabili