I just got a call from a guy I have know over 17 years. When he retired, he rolled his 401k plan to his bank. Immediately, he was introduced to the banks investment advisor.

This fellow had little or no knowledge about investing, and he let the broker from the bank talk him into putting his rollover into annuities. Since annuities pay the bank around 4-5% on the amount invested, the bank had a nice $20,000-$25,000 pay day. Please be careful of bank brokers.

Here's my take on these people, and others to whom I refer to as "Peeping Tom's".

ARE YOU DEALING WITH A PEEPING TOM?

In light of the recent merger activity among major banks, I thought it would be timely to give you my analysis on how mainstream America痴 assets are slowly being seized by New York Banks and Brokerages. Why are they doing this? I believe that the New York Banking and Wall Street elite realize that traditional brokerage operations are slowly dying. Investors began flocking to discount brokers and banks to avoid conflicts of interest, and high fees.

Wall Street investment firms have no intentions of changing their ways, so what better way to recoup lost assets, than to merge with someone the public absolutely trusts, a bank. We are actually witnessing the execution of a brilliant plan by Wall Street, to capture and control more of your assets than ever before.

A Bank/Brokerage combination will allow the banking arm to share information about you with the brokerage division of the bank.. And you thought little red riding hood was easy prey? For brokers, this is like manna from heaven. A broker no longer has to deal the hassles of prospecting and worrying about 電o not call� regulations. The bank/brokerage combination spoon feeds its brokers more prospects, like you, from the banks depositor and lending lists.

During a press conference announcing the JP Morgan/Chase- Bank One merger, JP Morgan CEO Harrison said 展e are a leader in investment banking and this adds new clients and scale with the ability to cross-sell.� Boy I値l say. Wall Street is buying Main Street. Let痴 take a closer look.

PEEPING TOM # 1- BANK BROKERAGES�: Not long ago I made a deposit into my account at a local branch of a major bank. The teller informed me that a ten day hold would be placed on the check, and the proceeds would not be available until then. Taken aback by the length of time, I asked the teller 層hy so long?�. The teller informed me that it was bank policy and a standard clearing procedure. Seeing my disappointment, the teller said she would speak to the manager and see if the hold could be lifted.

The next afternoon I received a call from the bank, and a nice gentleman informed me that he had lifted the 10 day hold on the check, and the proceeds were now in my account. I thanked the gentleman for his gracious attention to this matter, and was very appreciative of his efforts. Then out came the hook! 徹h by the way Mr. Mugarian, I am also the financial advisor for the bank and we�.� He proceeded to tell me all about the brokerage services the bank provided.

My initial reaction to the release of the 10 day hold was one of appreciation and gratefulness. When I heard the 登h by the way, I felt taken advantage of and thought, 典his wasn稚 a service call, this was a sales call!�

A week or so later, I received a recruiting call from the regional manager of the same banks brokerage division. I was really curious after my encounter with the local broker, so I asked a lot of questions. The regional manager told me that traditional brokers who become bank brokers double their production in less than 18 months. He informed me that the bank and brokerage operations have a system of working together, and that bank brokers are privy to information that traditional brokers are not. I asked like what? He informed me that the bank brokers receive information from the tellers on customers who make large deposits, and the tellers are encouraged to do this by the banks management. In addition, bank brokers also had access to maturing CD痴 list and account balances.

Boy talking about Peeping Toms! My goodness, this has to be an invasion of privacy to say the least. You池e not going to believe this, but this 撤eeping Tom� approach is perfectly legal and is not considered an invasion of your privacy. Since the bank and its brokerage operation are technically under one roof, no laws have been broken. All this may be what JP Morgan CEO Harrison calls, 渡ew clients and scale with the ability to cross-sell�. No Mr. Harrison, this is called 撤eeping Tom�.

As more and more banks and brokerages merge their businesses, your banking information will be shared among the companies that make up that combination. This is scary! In light of the massive merger activity among banks and brokerages, new legislation needs to be introduced to protect the public痴 interest. Until then, you must understand what is going on, and realize that your once private bank accounts are not private anymore. If you get a call from a broker a few days before you have a CD maturing, you値l know why.

PEEPING TOM # 2- ACCOUNTANTS- During the excesses of the 1990痴, several auxiliary professions began expanding their businesses to include investments. During the ragging bull market, accountants became envious of the brokerage profession as they prepared tax returns for brokers as well as their clients. Seeing how much brokers were making, and being the opportunists that they are, accountants thought 塗ey, we can do this too�.

Since most investors trust their accountants more than their brokers, the accounting profession felt that providing financial advice to their clients would be like shooting fish in a barrel.

Industry trade publications like 典oday痴 CPA� show accountants how to expand their businesses and increase revenues. Accountants are taught to use the 田onsultative approach� to make the client comfortable with the accountant as a 田onsultant or advisor�. Since a client relies heavily, and trusts explicitly the accountant for tax advice, a natural tendency is to do the same regarding investing. But remember, when an accountant that is compensated for giving investment council begins discussing your investments, the advice has stopped, and the selling has begun.

Accountants qualify as 撤eeping Toms� because they, like bank brokers, are using private and confidential information for personal gain. Now, if an accounting firm would offer and advertised their financial services to all their clients that would be fine. But, when an accounting firm has access to w-2痴, 1099痴, real estate holdings, and banking and brokerage statements, they might have a tendency to pick and choose who they offer financial services based on who would pay the most in fee痴.

Accounting firms that offer financial counseling have had great success against brokers. One reason for their success is they play the perfect role of a devils advocate, and a second guesser. Regardless of whether we池e in a Bull market or Bear Market, there are not many brokers that can overcome statements by an accountant once they are firmly planted in the clients mind. For example;

Bull Market Phrases:

1)Why did you have to take all these capital gains this year? You may have to pay a penalty if you didn稚 pay enough in. Or, this dividend income is going to kill you.

2)You sure paid a lot in fee痴 this year, what was your return?

3)I知 concerned about how you assets are allocated; you may be taking too much risk. Would you mind if I looked into that for you?

In a Bear Market, the client becomes even easier prey since most people are already upset over losing money. At this point, the client is emotional and is willing to listen to any alternative. Since the accountant is assuming the role of being your consultant, their comments reflect your losses as being your own. For example:

Bear Market Phrases:

1)I can稚 believe this (looking at your portfolio), someone obviously did not do their job.

2)You paid all these fees and still lost all this money? This is ridiculous.

3)If your assets had been properly allocated, you would not have lost all this money. Who痴 your advisor?

4)I壇 think seriously about making a change. Would you mind if I did a thorough review of your account?

I am confident that there are many highly competent accountants who provide great investment advice to their clients. The trust placed in accountants as tax advisors should not be automatically assumed when it comes to your investments. When an accountant approaches you about your investment business, keep in mind the various points made here. Carefully evaluate what they have to offer, and never be swayed to make an emotional decision.