I was recruited out of college to work with, at the time, the largest bank on Wall St in their private client group. I was drawn to the business because I wanted to help people make smarter financial decisions. I witnessed with friends and relatives that it was not enough to just work hard and make a good living. You need to have a plan and strategies in place to get to where you want to go. Being intentional makes all the difference. That was my motivation to go into finance.
Like any newbie on the job, I knew nothing at first, but I quickly observed a couple of things that didn’t sit right: First, every week we had a sales meeting where we were told of a few specific investments that would pay us extra bonuses if we directed client funds into them. Second, each day there were wholesalers roaming our halls (like they had a free pass into the joint) pitching their company’s funds and trying to get us to use them in client accounts. Everyone of these wholesalers would offer to “help” us grow our practices. Here’s what that looked like:
If we wanted to invite people to a fancy lunch or dinner presentation or some other nice marketing event, the wholesaler would foot the ENTIRE bill. That’s how they would help. They were the money, but what do you think they expected in return? If they didn’t see any deposits into their mutual fund after that point, then there would be no more “help.” I literally saw “advisors” pick one or two wholesalers that were willing to spend (which was the only requirement), and create their entire annual marketing strategy around them. And sure enough, every new client got a healthy amount of their account invested in that wholesaler’s fund. Were we putting client money into good investments for them or for us?!!
Although I was young and ignorant at the time, I recognized a conflict of interest when I saw one, and this one was massive!! And don’t be naive enough to think that anything has changed since I was in Wall St. This is still a typical day inside any of the name-brand Wall St. firms.
However, there is a silver lining to these early years. It was this experience that caused me to question everything about the financial industry. I was too new to have bad habits, I hadn’t been there long enough to become addicted to the cool-aid, and I certainly didn’t have any golden handcuffs to blind my better judgement. I was able to take a step back and see things as they really were, and that made all the difference!
I decided to build my career on doing what was right for my clients and avoiding conflicts of interest. Unfortunately, this isn’t the path of least resistance, and that’s probably why most advisors don’t venture down it. It requires more effort, more study, more creativity, more brains. It requires being willing to step out into the unknown and walk (run) away from those firms whose values don’t align. Yet, it also gives you the ability to think way outside of the box, to look at a problem and not be limited in finding the right solution. There are no strings attached! So, needless to say, I left the big iconic firm and ventured out on my own.
The reality is, for better or worse, money touches almost every aspect of our lives. It influences our health, it affects our relationships, the community we live in, our education, our opportunities, our children…everything! As an advisor, I literally feel that weight. I oversee my clients’ entire livelihood. Why would I screw with that?!