It’s hard to avert one’s eyes when rogue advisor stories appear in the press. But what can you learn from these stories? That self-centeredness has tragic consequences.
Consider these true-life examples:
- A Long Island, N.Y.-based broker agrees to settle SEC charges that he defrauded elderly nuns in the Bronx, N.Y. The SEC claimed the broker churned low-risk accounts and charged excessive fees, consuming 10 percent of the accounts’ value in a 13-month period. Without admitting or denying wrongdoing, the broker agreed to an order banishing him from the securities business.
- A New York financial advisor pleaded guilty in federal court for stealing nearly $200,000 from an investment account held in trust by guardians of disabled children. Although the funds were supposed to be invested only in U.S. Treasury Bonds or New York Municipal Bonds, the advisor made unauthorized trades to receive higher commissions, generating fund losses of between $400,000 and $1 million.
- The Securities and Exchange Commission charged a 77-year-old financial advisor for defrauding 2,600 mostly Amish investors. The Ohio advisor raised $33 million from the investors, promising them he’d purchase risk-free government securities. Instead, he made high-risk investments and sustained $15 million in losses. What made these advisors do what they did? Did they act out of greed, stupidity, or a lust for power? All of the above. But I believe another factor was more important: self-centeredness. Their purpose in life was to bask in self-generated glory. Blinded by their own light, they viewed clients as a means to selfish ends. And their distorted view ended up wrecking their lives and the lives of their loved ones.
So how do you avoid self-centeredness? Here are a couple suggestions:
- Put your self-confidence in synch with reality. If you find yourself having grandiose self-beliefs, ask a trusted friend or advisor to put them (and you) in proper perspective.
- Resist the tendency to pursue power at all costs. Hurting others in the pursuit of ambition is wrong. Just don’t do it.
- Don’t treat people right only when it serves your own purposes. Do it all the time because it’s the right thing to do.
- Don’t make decisions based solely on internal beliefs. Your “gut” will often mislead you. Instead, draw upon the external values you learned at home, at church, and at school.
- Most importantly, don’t let self-centeredness sabotage your life. Those who serve their clients’ best interests get to write their own happy endings.