The latest issue of Wealth Management magazine dealt with the upcoming election.
One of the more interesting things about our recent presidential election (and it’s a long list) is that the traditional political battle lines have not only moved, they’ve been decimated—broken into such unrecognizable shapes that the head spins.
What the Editor found interesting is that neither candidate projects warm feelings toward Wall Street for different reasons.
For both parties and their supporters, Wall Street, and by extension financial services, is to be viewed with deep suspicion and skepticism.
The editor finds this troubling. We’re not so sure. When you turn your financial affairs over to another there has to be a certain level of trust. However that trust must be reinforced over time and “Wall Street” has done enough damage to the trust that people have placed in it that it deserves to be viewed with suspicion and skepticism.
Trust is generated when promises made are promises kept. The problem is that too often the promises that the major Wall Street firms have made were deceptive. Wall Street firms like to pretend that they have the best interests of their clients in mind. The truth is that the firms view their clients as customers and their brokers as the sales force. The object is to generate commissions via the sales of products created to generate profits for the firm. And if it benefits the client, that’s nice but it’s a by-product of the sales effort.
That’s why the growth of independent Registered Investment Advisory firms has been a good thing for people seeking investment advice that they can trust. RIAs who charge fees for their services are not compensated for selling Wall Street products. Because they work for their clients, not for Wall Street firms, they do not have divided loyalties. They are supposed to be fiduciaries, not salesmen. Not to say that there are no bad apples in the basket, but the vast majority of them will work to earn your trust.