Organizations in every industry are subject to certain laws and regulations that guide their conduct. These regulations are tailored to protect the stakeholders and clients from exploitation in the course of carrying out business. All entities in the industry are bound to adhere to these rules, each individual involved owes the duty of skill and care and thus ignorance is never a defense. Professionalism and accountability are the most necessary of traits among the industry players.
The film is set about the loopholes in the stock market through which one can evade the scrutiny of the authorities while fleecing individuals of their hard-earned cash. The stock brokerage firm, JT Marlins is a small company in comparison with others in the market despite handing out commissions four times what the big and more stable companies can afford. Seth, who is the main character, is a talented salesperson whose education level could not afford him a place in the mainstream trading companies.
When a chance springs out at JT Marlins, he is too willing to take owing to the opposition he has faced from his father because of his casino business. It does not take long for Seth to decipher the fact that the income levels of the brokers the firm are not commensurate to their creditworthiness and that most of the brokers are broke for the better part of the month. After he gets a hang of the deal and realizes the operations of the company, his exit plans land him in trouble after the FBI set him up as a target.
Problems in Employee Selection and Training
JT marlin is a company dealing in investment advisory. As a financial services brokerage company, the management is bound to deal with the investments of many individuals, which requires ample financial knowledge and training. As observed from the movie, most of the senior stockbrokers at JT Marlins do not qualify to perform any advisory functions in the mainstream and legitimate brokerage firms. As a result, it is possible to decipher numerous loopholes in the characteristics of the workforce present in this organization.
As outlined by Armstrong (2003, p 416), the employee selection process leaves a lot to be desired. The recruits are sourced from a background of limited financial-services training as well as experience. Unlike most financial firms, the recruits are shoddily dressed and are in their most casual moods. One of the aspiring trainees is elated that he will make it through owing to the fact that he has certification, although he is the first one to be disqualified. The organization does no background checks on the employees to ascertain their appropriateness (Mabey et al 1998, p 206).
It is clear from the fact that Seth is a dealer in a casino and ends up as the most promising candidate. Contrary to what the organization portrays, brokers of financial services are supposed to have the highest training in financial services and possess knowledge in financial products as a basic characteristic. Merit basis dictates that the most experienced is the most appropriate.
The brokerage firm offers very sketchy training to its employees regarding financial advisory. Actually, training is barely formal. Much of the information handed out to the trainees relates on how to make calls to clients and feed them with information with the sole aim of closing a sale. In the firm, the end justifies the means. Most of the prospective clients are victims of half-truths and about moving stocks that are creation of the management of the brokerage firm.
Seth is a victim of this form of training where he is informed of how to get clients interested through creating a scenario of suspense to the client. Most of the trainees are introduced to the art of lying by imposing titles upon themselves to attract the attention of the prospects. The management is also packed to amass gloat over the importance of making money without any mention of integrity and accountability. As a result, the trainees are bred to believe in churning returns at the expense of their career development.
Steps That Should Be Taken
JT marlin is a company whose staff is poorly selected and trained. By deliberately choosing to work with staff whose qualifications are significantly below the stipulated and expected academic competence, it is obvious that the organization needs review is human resource and recruitment faculties. Concerning staff selection, the organization should have a basic and minimum qualification of knowledge and competence with which to work (Armstrong, 2003, p 410). Such qualification should comprise ample knowledge of financial services and customer care. A qualified workforce will eliminate the need for fabricated promises in order to close sales with prospective clients.
Similarly, any experienced trainees should be treated as an asset to the organization since he or she brings knowledge in addition. Qualified staff is less likely to be manipulated by unscrupulous management and clients. As a result, qualification and competence should be the main deciding criteria for professional engagement. Similarly, due to lack of professionalism, the employees are fond of letting personal issues mingle with work related matters. The observed hostility between Greg and Seth is borne out of the budding friendship between Seth and Debbie who was formerly in Greg’s inner circle. As a result, Greg has obviously alienated Seth and rarely offers direction during the training period. This is evident in spite of the fact that Greg is bound to succeed from the performance of Seth.
The company should also instill financial discipline among its employees (Mullen, 2009 p 195). As observed from the film, Seth was introduced to the firm by the brokers who used to frequent his casino. Most of their earnings were laid out for binge drinking and nightclubs as well as fancy spending. Without the necessary discipline to the employees, the organization was unable to maintain a firm grip on the employees who were less concerned about the legitimacy of what they were doing. On the contrary, their main worry was the source of the next stash of cash to fund their spending sprees.
As suggested by Carmichael & Pomerleano (2002, p 26), it is also necessary for the company to adhere to the guidelines and regulations of the governing body. The SEC oversees the activities of financial service providers. As a result, the brokerage form should strictly follow the guidelines in order to level the playing ground for all the industry players as asserted by Cascio & Boudreau (2008, p 22). As observed, their rise to the top is characterized by mud slinging since their promises are of quick gains. By trashing the reputation of their competitors, JT Marlin is able to wrestle market share by promising magnificent returns to the gullible clients.
The management is mandated to steer the organization towards the right direction. Matters relating to compliance are left in the hands of the management since not all the employees appreciate the nature of the company. The failure of the company to comply with the requirement of the oversight body is borne out of the fact that the company is a sham. The manager of the company is actually the owner of a fully operational residence incase the federal representatives raid the customary location of business.
As discovered by Seth, the organization thrives on fabrication of prospectus for the IPOs. Such prospectuses are sent to the prospects with the hope of selling the ideas to them. The lucrative margins displayed in the prospectus are the basis for decision-making by customers. However, it is advisable that, before the customer makes a decision to buy stocks in an IPO, he or she should validate the information from the authorities. However, most customers are quick to trust the information contained in the package and fail to vouch for the reliability of such information.
Employees have a duty to protect their careers and livelihoods by ensuring that fair practices are extended to their work places (Carmichael & Pomerleano, 2002, p62). By failing to act upon the realization that the company was a fraud, Seth placed his future in jeopardy, in addition to that of his father and fellow workmates. Similarly, Debbie was also aware of the trading practices but failed to raise any questions, the same scenario applicable to most of the senior brokers. As a result, closure of the brokerage firm was bound to affect their livelihoods and compromise their careers forever.
The Reason Underlying the Recommendation
As emphasized by Mullen (2009 p 54), financial advisory requires ample knowledge in the intricate nature of investment and fund management. Owing to the nature of the industry, trading practices ought to be as transparent as possible. A high degree of professionalism is mandated of all the individuals who are allowed to handle clients’ money. Thereby, it is imperative that the management of any company in the financial sector adhere to all the guidelines (Cascio & Boudreau, 2008, p 25). Any significant differences between two companies necessitate investigation, as they could be indicators of fraud. In the case of JT Marlin, it was evident that the commission was indicative of foul play. Similarly, the competence of the brokers to handle clients was severely handicapped due to their lack of financial skills.
Kahn (1988, p 8) posits that the management should also source for qualified and competent brokers to handle the clients as highlighted by Mabey et al (1998, p195). By so doing the management will ensure that, the short-term and long-term success of the firm is assured due to the level of customer satisfaction. Without the right skills geography among the workers an organization is unable to achieve any tangible results.
A financial advisory firm holds the key to the success of people in society. The nature of the service offered bestows huge responsibility on the shoulders of people who purport to provide such services. As a result, it is imperative that the stakeholders keep an eye on the actions of the industry in order to avoid the adversity that accompanies any illegal practices by the firms in the industry. In spite of the necessity of the regulatory authorities to oversee the functions of the industry, it is the duty of the clients to mitigate the risk of buying the financial products and services from trustworthy and proficient providers.