I work as a portfolio manger for a financial rep with a large insurance company. I read your letter about closing down your brokerage yesterday and yeah, the market is done even pretending to be anything but a joke.
I came into the office this morning and overnight the home office sent out an email announcing that due to “recent volatility” in select stocks we can no longer place buys on a certain list of stocks (you can guess all of them) in discretionary accounts and we can only place unsolicited orders in non-discretionary brokerage accounts. We were then lectured on our duties under SEC Regulation Best Interest. It’s all about protecting clients, you see. They’re way too dumb and even their advisors are too dumb to help them without oversight and restrictions.
I’m done. This is insane. As of now, we’re not having to close out positions at least. But I’m done. I’m not sure what the Lord has in store for me, but my exit strategy is going to kick into high gear as of today. The PC idiocy from higher up can be ignored, but this arbitrary edicts to limit what we and our clients can do is a bad precedent. It’s not going to stop with GME. Next up is badthink stocks and then probably gold and other bets against the Fed (that would be as unpatriotic as not wearing a mask).
My prediction is that the SEC/FINRA isn’t going to do a thing against any brokerage house, investment bank, or hedge fund over all of this. However, I bet FINRA is going to start trying to figure out which regulated individuals participated and come down on them like a ton of bricks in addition to working with the SEC will make some examples of folks in the Reddit channel. They might even come after Elon Musk this time for the unpardonable sin of hurting the big boys.
Also, on a related note, while I’m sure some insurers are refusing to pay death claims due to COVID given how certain carriers operate. However, I can confirm that my firm is paying death claims, I’ve been involved in a few of them directly (all elderly and in nursing homes, hmmmm). So, yes, it’s not hopeless (at least for now) to get a payout with all companies. There is some value in paying a bit more for a better company with enough cash that they don’t play games with death claims if you’re going to get insurance.
Please keep my family and me in your prayers as I hadn’t planned on jumping ship this soon, but the writing is on the wall. It’s sad, I do love the team I’m on and we all, despite our various backgrounds and views on the team, try to help our clients by taking the burden of managing their finances off of them. I think we do a great job of it, but doing so in a rigged system is just getting old.