I write this as a warning. If you are an advisor or a client. Do. Not. Be. This. Guy.
Most of my adult working life was based in a wirehouse environment. If you don’t know what a wirehouse is, let me name a few: Merrill, UBS, Morgan Stanley, Wells Fargo… And really — any person having the audacity to call themselves a Premier Banker in any bank branch anywhere. All warehouse personnel. Excuse me, wirehouse.
Wirehouse people are paid to make bad decisions everyday. Example — free lunches in the office consist of: crappy three-day-old salad with stale croutons… or pizza.
What would you choose?
It’s ingrained in the culture from top to bottom, bottom to top in a 1000 decisions made within the culture daily. Sell one little annuity here. An alternative investment there. Maybe sell one more mutual fund from that company which hosts amazingly great annual due diligence meetings with jumbo shrimp in exotic locations and posh hotels. I always found it ironically interesting that the hotels we stayed in had more stars than the investment rating of the funds we were selling. But if you only shoot up a little bit of heroin that doesn’t make you a junky, does it? Don’t be that guy.
Open 30 accounts, Do 6 financial plans (because then you tell us where the rest of the money is), get $10 million to manage, do $100,000 in billing. That was a decent year in 2000. As a rookie. Today with firms taking 30-50% of your pay… a much much different world. 2000 clients, corner office. And for what? A bull running across a field in some commercial? An outdated company-issued computer? Or maybe it’s those snazzy voiceover commercials tugging at your heartstrings about a better tomorrow and your family from days of old. Or maybe, just maybe, the firm your advisor works for has its name on the walls at Wimbeldon. While all the box seats hold the company executives, right?
Do not be the last guy to leave the office. I was. I was also the first, to leave them behind forever. And it hurt when everyone stabbed me in the back about how much better clients would be to stay inside the Walled garden, but everyone who pointed their finger left shortly thereafter. Do not be last. Do not be the finger pointer. Do not be the guy to lie about anything. You will die sooner than later.
I’ve seen good people do less shitty things because somebody’s got to pay the mortgage, and this is the way the system is. Some are conned into believing they’re doing the lord’s work; Greed is good. What we do here in the sacred Wirehouse is legitimate, the lesser of evils, with a capitalist-elitist-lower-class-vibe floating the whole thing. Amway for stocks. And bonds. And really anything with a 5% commission.
And as long as the old rich white people remain in charge, don’t we all know where this is going?….Up, Up, Up.The only way to win is to play the game. We’ll never get rid of them, they will simply become a limited edition, only increasing their value. Bastards, they always win.
…I was always struck by the fact that my business partner would often spend our entire entertainment budget almost every single time we went out, even if it meant uncorking 5 bottles of vintage wine to take home in a doggy bag. Either he was a closet drunk or was reselling it (I wouldn’t put it past him, there’s a market for everything…) Or, my guess — most of it just went to waste after he had a glass or two of each. Obviously he was drunk on something. He was a shareholder too.
Don’t be this guy…
Today, I moved a $1,000,000 relationship from my old firm. That’s not some huge amount. And actually I moved $700,000. The other money was cash they were keeping liquid, elsewhere. Because the advisor never earned it. Maybe I’m happy. I’m certainly happy for the client, she was getting completely screwed. Paying 1.45%. No call in two years. Funds almost all underperforming. Dumb. Sloppy. And maybe worst of all — Margin debt on a $700k account so the firm could earn 8% for the house and a .5% payout on that debt to the advisor. Mr investor, never forget that your cash is actually a business of humping bunny proportions. Or maybe the advisor was just dumb about all of it. Don’t be that guy.
Don’t be some Senior Vice President with 2000 clients who you won’t/don’t talk to for 2 years. Don’t be the guy to not have a team in place to handle basic service requests without you there. Don’t be on the golf course all the time. Don’t be in the office all the time. Make house calls still. I’ve learned more around the kitchen table than I ever learned around the conference room table.
Wow… you’re A Wealth Advisor, Really? Neat… That is so neat. Absolutely neato.
You. Managing Wealth. Neat. Good. For. You. And obviously you’re very good at it, because you play golf really well and know a lot of adjectives when describing wine. And about that restaurant. And football. Clearly your Alma Mater is the best, so I should definitely listen to you. It sounds so official when you say it, doesn’t it? Wealth Advisor. Don’t be that guy.
Or, maybe you’re so socially introverted it must be that you’re Rainman smart about things in the market. You’re obviously the 1%, I can tell from your constant statistical droning while I’m trying to enjoy myself at this party. I’m very lucky to listen to everything you say breathlessly about all your fantastic ideas, or the things that you don’t say, as you simply stare at me like a cheetah does the Zebra.
I loved your postcard from your awesome vacation from your timeshare too. Was that a time-share jet too, or do you own that? Wow — that is so cool that you have your pilot’s license, I’ve been meaning to do that… I just can’t get away from the office enough to actually do it.
DO NOT BE THE GUY who is actually so pleasantly surprised that your client is doing so well this year that you forget to play it straight-faced on the phone with them. “Wow! You’re doing great this year!!”
As a matter of fact, do not ever sound surprised about anything. You saw a chart handily shooting down every concern they bring to you, or something didn’t you? You read that same article too. Right?
Do not tell me about how 75% of my funds would be better in an index… because that would be useful.
Do not tell me Gold is dumb. You clearly are a liberal pansy with no mind for what’s right in this world.
Do not negotiate your fee when a client is about to fire you, you will look like an absolute total douchebag. Don’t. You’re fired. Don’t.
Do not say no-load funds are s#$t. Or indexing is dumb. Do not pretend that you’re adding any value in this brave new world, unless you truly are. The truth shall set you free. Do not pretend the constant trading within the accounts is anything more than the institutional surtax on retail America.
You hear the robots breathing down your neck, don’t you? And, do not say your firm is the best at anything. Ever. Again.
Do. Not. Pass. Go. Or collect $200. 2008 is still fresh in every client’s mind.
Do not be this guy.
*steps off soapbox…*