In the end, U.S. stock markets decided to heed the storm.
The New York Stock Exchange had planned to open trading electronically while shuttering its physical trading floor. “We are open for business and at the same time acting in accordance with actions taken by the city and state of New York,” said NYSE CEO Duncan L. Niederauer said in a release yesterday afternoon.
But NYSE reversed course last night, announcing it would halt operations completely. The exchange is closed today, and may close tomorrow, “pending confirmation,” according to a release.
Nasdaq is also closed today; “it is likely that the markets will be closed” tomorrow, the exchange said in a release.
Bond markets will open, but the Securities Industry and Financial Markets Association recommended that markets close at noon today.
“The trouble is that brokers are screaming, ‘Trust me, trust me, you don’t have to bother your little head. I’ll take care of you, I’ll manage your securities and give you financial planning for you and your children and everybody else,’ Tamar Frankel, a law professor at Boston University told us. “‘Trust me, give me discretion to decide what to do with [your] money.’ If that’s not fiduciary, then what is?”
Ms. Frankel was on the phone to discuss the most important consumer issue you’ve probably never heard of. For more than half a century, the financial professionals who offer investing advice have fallen into two broad categories. Broker-dealers charge commissions on the securities they trade on behalf of clients. Investment advisers charge fees, typically as a percentage of assets under management. There’s another crucial difference. Investment advisers must register with the Securities and Exchange Commission and have a fiduciary duty to act in their clients’ best interests. Brokers, meanwhile, are self-regulated and operate by the standard of “suitability.”
“The brokers say they have a rule, and the rule is, they must give you suitable investment advice,” Ms. Frankel said. “I use my expertise to give you something that you can use, that’s suitable for you. But suitability doesn’t mean cheapest. It may be suitable, but you can go next door and get it at half price.”
As the world turns
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