In a coffee shop yesterday, we overheard another accountant pitching their client on money management services through a Bay Street firm. We have heard many anecdotes and complaints from people across the country about the aggressive cross-selling of accounting/legal/investment services this cycle. It seems that many accountants and estate lawyers have signed on as sales people for some of the larger investment management franchises.
In this fee sharing frenzy, the clients are suffering from a lack of unbiased advice: bearing the cost of both higher risk and fees as the accountants and lawyers add their investment advisor cuts. To try and justify the higher costs amid low yields, these teams of ‘advisors’ are recommending the clients take on high risk weightings for their savings. All very complex and sophisticated sounding. But only in form rather than substance.
When the next bear market devours hard-earned savings once more, the lawyers and accountants who have added their professional weight in persuading long-always-risk exposure should be sued along with the self-serving financial advisors and managers who have chosen to put their own income collection ahead of the best interests of their clients. Litigation lawyers should next be due for a profitable run. Unfortunately, many clients will never make up the lost money, time and mental anguish. All of this should be barred by ethics and regulation of course, but the finance/professional services lobby has been writing the rules.
For more on this see: Beware of accountants offering harmful investment advice and Beware of your accountant?