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Who they are – How they get paid
Staff Writers
According to the Dictionary of Health Economics and Finance, a bond-broker derives her or his income differently than a fee-for-service financial advisor with assets-under-management [AUMs]; not necessarily unlike a stock broker.
www.HealthDictionarySeries.com
Transaction Driven Commissions
In other words, bond-brokers use transaction-driven sales, and earn commissions based on turnover in a brokerage account or portfolio.
No Quarterly Management Fees
Although the bond-broker takes no quarterly management fees like a financial advisor, the broker’s advice may be colored by the commissions associated with bond issues he or she recommends; which results in an inherent conflict of interest in the broker relationship.
Assessment
Thus, the physician-investor must constantly be aware of the potential for being sold debt-based securities that may be more advantageous to the sales broker than the doctor’s portfolio. Realize too, that the current Credit Default Swap [CDS] fiasco on Wall Street today was prompted in many respects by aggressive bond-brokers! So, always remember Caveat Emptor!
Conclusion
While a bond or stock-broker may offer advice, the physician-investor makes the decisions and therefore is accountable for them. And so, your thoughts and comments on this Executive-Post are appreciated.
Related Information Sources:
Practice Management: http://www.springerpub.com/prod.aspx?prod_id=23759
Physician Financial Planning: http://www.jbpub.com/catalog/0763745790
Medical Risk Management: http://www.jbpub.com/catalog/9780763733421
Healthcare Organizations: www.HealthcareFinancials.com
Health Administration Terms: www.HealthDictionarySeries.com
Physician Advisors: www.CertifiedMedicalPlanner.com
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Filed under: Financial Planning, Investing, Portfolio Management, Risk Management | Tagged: bond brokers, credit default swaps | 1 Comment »
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