As JPMorgan Chase was
increasingly getting into the managing function of mutual funds, the bank also
created and sold its own funds. I submit that these two tasks being done by the
same firm constitutes a structural conflict of interest, regardless of any
purported “Chinese wall.” In other words, a certain tension exists when the two
functions are performed by the same business entity because the incentives in
one of the two tasks (i.e., selling one’s own funds) inherently shirk the
viability of the other task (i.e., being a financial advisor). In particular,
the objectivity implied and even advertised in the latter is apt to be
relegated as the sales function kicks in. The “answer” to this ethical problem
is that a given bank should do one or the other, but not both tasks. Put
another way, only a fool tries to do everything—only a greedy fool.
Geoffrey Tomes admits to having favored the bank's own funds in "advising" clients
The full essay is at "JPMorgan: An Unethical Monstrosity? and
Institutional Conflicts of Interest, both available in print and as an ebook at Amazon.