August 7, 2018
If, SEC, you are not going to eliminate the perverse incentives that reward the perverse behavior, then I suggest that you require brokerages/investment firms/banks explain in detail what those perverse incentives are. Here's an example that I use to immediately grab the attention of the firefighters with which I have work.
Perverse incentive example: I tell firefighters to imagine that their pay is dependent upon the number of fires that they put out. Then I ask them what might they do to increase their payout (income). Their eyes get big, and then they sheepishly and tentatively say/ask "Start fires?" I say, "Yes" Then I say to imagine that it's December 15th and that they are told that if they put out an extra 10 fires before the end of the year, their payout/income for the year will be doubled. Their eyes get huge. I end my example with this. "Well, that's how brokerages/investment firms/banks drive the perverse behavior of their brokers masquerading arm's length relationships as relationships of loyalty, confidence, care, and trust."
If, SEC, you are truly serious about protecting investors (saver's money) (which I don't really think that you are, as I think that you are in bed with Wall Street), you would eliminate the perverse incentives. If, however, you won't do that, what I do works. Tell investors what the perverse incentives actually are and tell it to them in a way that it grabs their attention like I do.