Ref: Why the big broker behind your financial adviser might be working against you
Tell me, which of them (the big brokers and investment houses) warned anyone about it being time to sell in 2000, or in 2007? There are exceptions out there, especially in smaller boutique style shops. But generally speaking, this thing we call Wall Street (big firms and the media that is their propaganda arm) exists to sell people the dream, then mark it up, front run it (in one way or another, legally or otherwise) extract fees from it and ultimately fleece it on the way down again (as regular people puke a tanking market and pay trading commissions for the privilege).
Here I cue up the old story about when I bought my first and only BMW (it was fine, but really it was not me) back in 2002. The deal was done and I sat with the business manager to finalize the transaction. He was a kid who had been fired from Merrill Lynch not 2 years earlier for keeping his clients in cash and totally safe at the market top. Problem was, he was not turning
tricks, err I mean commissions for Merrill. All done.
Then there are the Certified Financial Advisers (the ones not incentivized with ties to performance) who are little more than mutual fund salesmen. Don’t try to tell them about well rounded market analysis because they’re just going to go ‘la la la la la… I can’t hear you… have you stopped talking yet?… la la la…’ when you ask them about legitimate risk management strategies they employ. Mine told me in 2000 ‘well, MFS and Putnam have professional money managers who would never allow big losses like you yourself would probably experience’.
Well thank you Putnam for cutting my wife’s IRA in half by 2002 (and it turned out, front running it) and MFS for chopping 40% off of mine. This is when I pulled every penny from said adviser, did it myself and have since put on an annual average (including the last 3 very underwhelming years) of around 35% from 2002 to present day.
More than that though, the seeds were sewn for this website and its ‘not very pleased with Wall Street and the mainstream Financial Services industry’ orientation.
I get email updates from the White House and a recent one was talking about legislation to bring accountability to those financial advisers who are basically free to eat their clients (my words of course) and do not impose fiduciary responsibility upon themselves, and I think that is a good thing. These pigs need this responsibility imposed on them.
One thing that running NFTRH has done for me since 2008 is make me aware that there are plenty of advisers (some of whom subscribed) who are ethical and probably cannot live comfortably with themselves unless they are trying to do the right thing at all times. This post is obviously about the other guys. There’s a lot of them too. Indeed, I’ll bet the big firms are infested with them.