Wall Street's Grand Deception -
Is the investment advice you receive worth the fees?
The answer could determine the quality of your retirement.
Financial industry veteran Norman Pappous is pulling back the curtain on how retail wealth management firms actually work and how institutional clients enjoy greater investment performance transparency than what is offered to mainstream retail clients.
The book offers an expert’s take on deceptive marketing practices and arms investors with the knowledge of how to spot high-quality portfolio advice and avoid falling for a slick salesperson.
Excerpts
Finding a really good financial advisor has been made difficult by the industry. They would rather you select a financial advisor based on their billion-dollar marketing campaigns.
Consider this: thousands of financial advisors are fired by their firms for failure to bring in enough clients and fees to sustain their employment every year. Yet, I have never once heard of an instance of a financial advisor being dismissed because of poor investment performance.
… there is no incentive to generate the best investment results for clients. Doing so may actually get an advisor into trouble, since spending too much time with existing clients probably means not enough time spent prospecting for new clients. This concept was well-outlined over 80 years ago in the classic book, Where are the Customers’ Yachts? by Fred Schwed Jr.
Even the fresh-faced rookie who has just passed their regulatory exams has had dozens of hours of sales training designed to convince you of their professionalism, sincerity, integrity, and skill.
About the author
Norman Pappous was motivated to enter the wealth management industry by the circumstances surrounding the suicide of his 18-year-old younger brother. He explores the compelling reason he entered the field, what he found, and the choices he’s made.
Norman offers key observations in the book, including:
- How firms evaluate their financial advisors’ performances, beginning with sales quotas.
- Examples of how Wall Street marketing deceives rather than informs, like distorting the results of famous academic studies.
- Why you shouldn’t trust the portfolio performance reports generated by your financial advisor.
- Surprising secrets about financial advisor rankings and search services.
- Why having your financial advisor act as a fiduciary does not actually eliminate conflicts of interest