Definition of shingle theory’
The shingle theory is the study of the suitability of the securities and exchange Commission (sec) in the 1930-ies. The idea is that a broker who “hangs a shingle” will deal with their customers fairly and responsibly when making suggestions in respect of the securities.
Breaking down the ‘shingle theory’
How unusual and cute in theory shingles (or was). While most investment advisors today honest and acted in the interests of their clients in accordance with the principles of fiduciary duty, there are many unskilled, unethical, and greedy shingle-hanging of consultants or brokers who want to suck money from unsuspecting customers. Over the years, sec and other regulatory authorities as licensed finra (financial industry regulatory authority) have a reinforced railing to investors, so that the brokers can’t cheat their customers out of their hard-earned money. Still happens as some of the cockroaches will scurry away with crumbs and pieces of lucre, because there are too many of them and too few resources to crush their existence.
Allowing the hanging of the shingle
Because people demonstrated that this world is much more Rousseauian than Hobbesian, especially when it comes to money, some checks must be carried out by the regulatory authorities, before someone will be able to hang the appropriate sign to advertise their services as a broker or financial Advisor. Potential broker or other securities-related professional must pass a qualifying examination and the test to get the right to hang the sign. Whether in the old style shingles, fancy sign or logo emblazoned on steel and glass, the privilege of continuing visual display business must be saved, regular oversight by regulatory bodies, which will also bring enforcement actions brokers who step out of line.