betterment

Captain Obvious: Wall Street’s Problems Are Your Problems

It is said that if you know your enemies and know yourself, you will not be imperiled in a hundred battles; if you do not know your enemies but do know yourself, you will win one and lose one; if you do not know your enemies nor yourself, you will be imperiled in every single battle. — Sun Tzu

Ok, I wasn’t going to do this. I actually talked to a few industry friends of mine when I originally had the idea about a month ago. They said to take the high road and just do my thing. But after reading Betterment’s take on a study making the rounds about advisors being “Pigs” — well, I figure maybe it’s time to start tapping on some keys.

And here’s how I’m going to do it. I’m going dissect some of the incumbents. And I’m making it personal. As in, my personal opinions — probably backed up with some facts. My personal experience. My personal hope. My personal insight. And here is some of it today:

Here’s the thing. Every solution we’ve seen to-date hasn’t been made by someone who actually knows what they are doing. Let me clarify that statement. Your problems with Wall Street are my problems. And Wall Street’s problems are pretty simple:

1) They are selling products in an advice model

2) Their margins are completely upside down in the new world.

3) The information barrier is no longer a defendable moat.

3) The value & definition of what the consumer embraces is being completely re-written.  Old services are becoming more irrelevant as technology offers efficiency. New services haven’t been invented.

4) The current landscape is filled with Wall Street firms that are Too Big to Sail.

And every entrepreneur staring at this reality is also looking at the same math: $10 trillion dollars. That’s what they all think is the golden chalice waiting for them.

But here’s the thing. They haven’t been in the trenches, holding a client’s hand while the world comes crashing down. They haven’t sat across the desk from a client when a promise doesn’t deliver. They haven’t listened to management talk about the mission statement. They haven’t seen the way Wall Street actually works. And until you know, you don’t.

Oh, sure maybe their friends trust them to mix their 401k. Maybe they know a guy who lost, XX to some shitty advisor. A scam. Something too good to be true. A lie. A mistake. Whatever… they’ve seen the opportunity, so now they think they know. That they have the answer.

Trust me, you have no idea.

And neither do I, that’s why I’m here — because I need you to help me. But I do know this, I probably do know more than anyone else tackling this issue — and in my next post I’m going to use Betterment as an example of exactly what I’m talking about.

Read More:

Reformed Broker — Betterment: Financial Advisors are Pigs