Former Bank of America (BAC) wealth-management head Sallie Krawcheck said Monday that Wall Street is running the business through a “culture of crisis,” which must change so that it can attract new clients.
Krawcheck, who spoke in New York during an annual conference put on by the Securities Industry and Financial Markets Association (SIFMA), also stressed the need to attract more women to the profession.
“Participants are basically making quick decisions in reaction to today’s news as opposed to looking at the long-term implications of those decisions,” Krawcheck said at the meeting, as reported by CNBC. (Krawcheck was let go by BofA-Merrill in early September as part of a reorganization effort.)
In addition, Krawcheck said that too many of the markets have drifted from their original purpose. “Somehow we got to where they’re betting mechanisms. Not in every instance, everywhere,” she explained. “But we’re talking about them being tools for people to make money as opposed to the efficient allocation of capital.”
Krawcheck, who led BofA’s wealth-management unit for roughly two years, described the need for the business to come to grips with the fact that younger potential clients “no longer trust banks or the markets to create the wealth they’re looking for,” CNBC reported.
She also shared the thoughts of one of her former clients, who said that they didn’t have enough confidence in the markets and tax policy in the recent past to take out any loans, and “a good bit of it was, “I just don’t know what the growth is going to be there to get me a return on any money that you’re going to lend me.”