We’d like to write about a field in the services industry that we find massively overrated, and potentially hazardous to our readers. The United States is highly dependent on services and services today comprise around 80% (GDP) of our economy. Education is a service, as is medicine and entertainment etc. But we would like to warn you today of the vermin who call themselves ‘wealth advisors.’ If you, your Baby-boomer parents, or anybody in your family entrusts their wealth and time to these people, just hit Ctrl+Alt+Delete and walk the other way. Wealth advisors are as toxic as asbestos and have IQs lower than Wal-Mart greeters. They live off of 'churning and burning' their clients and their sole mission is this: commission. We've known wealth advisors at Merrill Lynch, Goldman Sachs, UBS etc, and frankly they're all the same. Most went to second or third-tier colleges and were semi-likeable athletes or frat boys. None of them were clever enough to pursue a real career in investment banking, law, or medicine. It's therefore ironic that intelligent people go back to the class clowns to invest their hard-earned dollars. In essence, wealth advisors live to garner assets and gain points from their firms by flogging fat margin products (fixed income, structured notes, derivatives etc). “You wanna buy 100 shares of Apple Inc? Keep moving asshole – we want you in this China commodity index that our middle market quants are pricing up for you.” Wealth advisors want you in the juicy stuff, which ultimately screws you because it's some fraudulent illiquid garbage that only enriches them from the fee structure and leaves you hanging high & dry (recall Auction Rate Securities back in 2008). I can't tell you how many wealth advisors in Midtown NYC work 20 hours a week, collect $1.0m a year (risk-free) off their commissions, and spend their entire weekend socializing in the Hamptons. It’s really disgusting.
Welcome Alternative: Retail investors (i.e. Mom & Pops) always end up buying at the top and selling at the bottom. Wealth advisory firms are diligently there to take advantage of you at both market extremes. More times that not, you should be doing opposite of what their ads on TV are saying; just tell them to stuff it. Look at putting your money into four or five ETFs that you like through Schwab or Fidelity. Invest for income/yield. Learn a little bit about valuation, and please, turn off CNBC and ignore that dingbat Jim Cramer. If Jim Cramer were worth his salt he’d be managing a multi-billion dollar hedge fund today, but he isn’t, nor will he ever. We prefer you watch Bloomberg TV (Margaret Brennan is great) and read the Financial Times a few times a week. Please contribute as much as possible to your 401k (lower your tax burden) and look at setting up a DRIP plan or Roth IRA for retirement. These few steps alone will stear you clear from these wealth advisors and Wall Street charlatans.
Welcome Alternative: Retail investors (i.e. Mom & Pops) always end up buying at the top and selling at the bottom. Wealth advisory firms are diligently there to take advantage of you at both market extremes. More times that not, you should be doing opposite of what their ads on TV are saying; just tell them to stuff it. Look at putting your money into four or five ETFs that you like through Schwab or Fidelity. Invest for income/yield. Learn a little bit about valuation, and please, turn off CNBC and ignore that dingbat Jim Cramer. If Jim Cramer were worth his salt he’d be managing a multi-billion dollar hedge fund today, but he isn’t, nor will he ever. We prefer you watch Bloomberg TV (Margaret Brennan is great) and read the Financial Times a few times a week. Please contribute as much as possible to your 401k (lower your tax burden) and look at setting up a DRIP plan or Roth IRA for retirement. These few steps alone will stear you clear from these wealth advisors and Wall Street charlatans.
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