My Bad Experiences Working in Finance

Little known fact about Money Viking G, on two occasions almost 20 years ago I tried working in the finance industry as a stock broker and financial advisor. Both times sucked and it explains a lot about what is/was wrong with personal finance and investing in America, at least it did to me. It also will explain why I think people should seek professional advice from a “fiduciary”, someone that is bound by law to have your best interests at heart.

Middle Class Kid In Beverly Hills La La Land

The first time was for a large investment firm in Beverly Hills. I am not kidding. I went to college in LA so I was near this strange other world of extreme wealth called Beverly Hills. Truly it’s own strange world that is not in touch with the 99% of the rest of us. As a middle class kid I was not into it. I was at an alumni event and met two alumni that worked at this large investment firm. I went through a series of strange interrogations, I mean interviews. It was a frat house alpha male culture. I also sensed that the people working there did not know all the answers, but pretended to. Basically these were fancy salesmen in expensive suits. I went through some personality tests and one asked:

”If your mother was passing away in the hospital but you had a major client that needed your attention to solve a business problem, what would you do?”

What a f$&#ked question. Yes, this place was strange and I instantly developed a bad sense of this industry of investment “helpers”.

Don’t take my word for it, Warren Buffett loves talking about all the “helpers” that people pay big money to for their advice to beat the market. One problem, most of these professional helpers will not beat the market. And if they do it’s probably due to luck. There is a time and place to see a professional fiduciary advisor, but take the services with a grain of salt. 10 years ago Warren Buffett made a friendly wager that a passively invested well diversified index fund would beat several actively managed portfolios, especially given the high fees the “helpers” charge. Buffett was right, you would be better of in a diversified index fund with low expenses.

Look! Your portfolio has been sawed into pieces by high fees!

12 Hour Cold Call Hell

The second time I tried working in the finance industry was for a medium sized nationally known firm. Again, I had visions of working with families and retirees on their asset allocations, discussing insurance, trusts and investment vehicles. In other words, helping people manage their finances and make their dreams come true! Boy was I naive and wrong! I would be doing a service to improve their financial well being, ha, yeah right! Not the case. I was handed a list of people in fancy zip codes. Then I spent all day calling them and asking if they had investable assets of $250,000 or more, not including their house. This is so this firm’s “helpers” could feed off these pots of gold, again with high fees that ripped people off.

Even after this I am not against people using the services of financial advisors or brokers. Just keep these things in mind:

– It is your money that you earned. No one will ever care for it as much as you. Be engaged and involved in decision making that is aligned with your particular risk tolerance levels.

– seek a “fiduciary” financial professional. They must have your best interests at heart when managing your money.

– Educate yourself, never trust someone else with all the decisions. Be a part of the decisions. Do research.

– If you are not satisfied, leave!

– Look very closely at the fees you pay. Some folks can end up paying hundreds of thousands in fees for nothing!

– The industry was once based on information not openly available to the public. In this era of smart phone computers and the internet, it seems like all the information is at our fingertips.

 – Keep good records of your accounts and execute a living Trust.

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