Beware Your Banker -- He May Be a Broker

You walk into your bank seeking safety -- but that safe haven has now become a danger zone. Consumer beware!

You trust your bank to provide only secure, FDIC-insured deposits. But you want higher yields than the bank certificates of deposit, where those 6-month CDs are currently paying less than 2% at most local institutions.

Now you're in the danger zone.

It's happening mostly to seniors, desperate to squeeze every last drop of interest from their remaining cash. But the desire is hitting all savers who want safety and more yield. And it's given new meaning to the term "money in the bank."

A friendly banker senses your distress. He offers his business card. It says "Personal Banker." You relax. (Or maybe it's your mother who now feels she's found a friend to help her out of the low-rate dilemma.) Nobody notices that on the bottom of the card it also says "registered representative."

That's right. The friendly banker is also a broker.

That's because inside most banks there is a securities division, with brokers licensed to sell everything from annuities to unit investment trusts to stocks, bonds and mutual funds.

They sit in those desks right next to the teller's window. And those friendly "banker/brokers" are all too happy to help a senior in distress improve her monthly income. And, by the way, they are compensated by commission on the products they sell.