To me there's an clear moral hazard in allowing stock brokers to also have "separate" divisions which carry on significant business doing things like:
* Managing investment funds for individuals and businesses
* Helping large private companies to launch share offerings on the stock market
* Acquiring and managing real estate investment portfolios
It's truly naive to think that Alf in Wealth Management won't be swayed to any degree by the most "earnest" entreaties of Wilf in Trading who is trying to sell off hundreds of thousands of shares for a new plc client.
Even more so when you think that Alf depends exclusively on the brokerage's own Analysis department to mark his card on what to invest in.
And all that's not to mention that Alf and Wilf fought side by side on many a dirty rugby game and ended up marrying two sisters.
There was a recent directive in the UK for large audit firms to separate the audit function into a wholly separate commercial entity.
I see no reason why the same logic, i.e. design out the potential for graft, should not apply for stock market brokerages.
* Managing investment funds for individuals and businesses
* Helping large private companies to launch share offerings on the stock market
* Acquiring and managing real estate investment portfolios
It's truly naive to think that Alf in Wealth Management won't be swayed to any degree by the most "earnest" entreaties of Wilf in Trading who is trying to sell off hundreds of thousands of shares for a new plc client.
Even more so when you think that Alf depends exclusively on the brokerage's own Analysis department to mark his card on what to invest in.
And all that's not to mention that Alf and Wilf fought side by side on many a dirty rugby game and ended up marrying two sisters.
There was a recent directive in the UK for large audit firms to separate the audit function into a wholly separate commercial entity.
I see no reason why the same logic, i.e. design out the potential for graft, should not apply for stock market brokerages.