Snakes in Suits - from the Wealthy Boomer website

Snakes in suits -- from whom do small investors need protection?
Today's column in the paper is about an investing "victim who found a way to get even." I find the very name of SIPA -- the Small Investor Protection Association -- interesting. It begs the question "From whom do small investors need protection?"

The markets, perhaps? Or worse, from themselves?

It's true that do-it-yourself investors can often be their own worst enemies, buying high and selling low and chasing fads at the worst possible time. China, for example, seems to be the current mania that will end badly, based on pronouncements this week from Alan Greenspan and other dignitaries.

In theory, a good investment advisor should be the ultimate protector of the small investor. And often that is the case. Unfortunately, as books like The Naked Investor or Snakes in Suits make clear, there is a minority of unscruplous brokers and advisors out there who prey on investors. Stan Buell -- the founder of SIPA -- believes that between 5 and 12% of advisors are not acting in the best interests of clients.

In those cases, sadly, investors may need protection from the very financial institutions that should be acting as fiduciaries. And in Buell's experience, some of the worst offenders have risen to the very top of the big financial institutions that dominate the investing landscape.

There's a book that was published last year called Snakes in Suits. It describes a species of "corporate psychopath" that preys on small investors or even subordinates in the workplace.

Fortunately, Canada has several consumer advocates -- like Buell -- who are willing to stand up to these well-dressed snakes. See the SIPA web site at www.sipa.ca for more resources, including a discussion forum.