DANA POINT, Calif., Aug. 21, 2014 /PRNewswire/ -- KPP Financial keeps clients' best interests in mind and avoids common conflicts of interest suffered by most larger brokerage firms through a strategy called Parallel Investing.
With the passing of the recent Financial Crisis, many investors are still skeptical about the stock market and the financial industry as a whole. There is a common belief that the big Wall Street firms are operating as 'business as usual', once again putting their interests ahead of their clients'. Just last month, the Office of the Comptroller of the Currency opened up an investigation into JP Morgan over the conflicts of interest that exists within their organization.
This is why KPP Financial, a boutique Registered Investment Advisory Firm, practices a strategy called Parallel Investing to keep their clients' best interests in mind and avoids these common conflicts of interest.
Through its strategy of Parallel Investing, one or more KPP Financial Principals invest in the same positions as their clients, buying and selling in parallel. Ironically, this kind of matching investment approach is not allowed by most of the larger brokerage firms, and has led to many documented conflicts between the firms' interests and the best interests of the client.
KPP Financial client, Phil from California said, "I hired KPP Financial because they have skin in the game, I couldn't find that anywhere else".
"My grandfather Gerald Klein founded KPP Financial, Inc. 21 years ago in large part to avoid the common conflicts of interest often prevalent with money managers, particularly those at the bigger institutions," said Justin Klein, Partner at KPP Financial and co-host of the firm's educational radio show, "InvestTalk".
There have been several high profile investigations, lawsuits and fines over the last few years as a result of these conflicts of interest. Just recently in a case regarding sub-prime mortgage backed securities, one leading firm was fined several hundred million dollars for advising their clients to buy these securities while the firm itself was selling them and even taking a 'short' position in the debt.
Some Common conflicts of interest that can be avoided with Parallel Investing:
- Investment Banking Conflicts: Recommendations can often be influenced to position the stock of an investment banking client, rather than prioritizing what best fits a client's needs.
- Privileged relationships: Clients with the largest portfolios or special broker relationships can receive better pricing and investments, leaving others at a disadvantage.
- Commission-driven churning: Many advisers are compensated on commissions and transactions, which encourages trading to boost revenue -- aka "churning."
"KPP is different in that we take on the same risks as our clients," said Mr. Klein. "We have the same skin in the game, and this really helps build trust. Parallel Investing is a big reason our clients choose KPP Financial to be their money manager." Every KPP Financial client benefits from the firm's Parallel Investing strategy. Additionally, KPP only makes money from AUM (assets under management), avoiding the conflicts that come with commissions. This is also known as a "fee only" or "fee based" management style. Together this provides KPP clients a greater sense of trust and confidence knowing that their money is being managed with their best interests in mind.
About KPP Financial
KPP Financial Inc. is an investment advisory firm established in 1993. Our firm has been built around the core principal of putting the individual investor first. With many decades of money management experience we not only understand markets and their unique and often confusing characteristics but we also participate with our clients in buying the same investments at the same time and price in each of our programs. It is our belief that an investment advisor should earn his clients' trust by exposing his own financial assets in the same way he does his clients. To learn more visit www.kppfinancial.com
Sinan Kanatsiz for KPP Financial
SOURCE KPP Financial Inc.