9th June 2010
The study reported in Fortune magazine showed that actors playing the part of investors seeking advice from financial planners, "walked out with advice that mimicked the biases in their original portfolio."
Conservative investors, for example, comfortable with sitting on their cash, "were more likely to be told to take the cautious step of buying index funds."
"The most telling result came from the actors loaded with company stock.
Just 40% of the planners told them to sell the stock and diversify their portfolio, even though the move would both be in the client's best interest . . . and generate commissions for the planner."