Close Close
Popular Financial Topics Discover relevant content from across the suite of ALM legal publications From the Industry More content from ThinkAdvisor and select sponsors Investment Advisor Issue Gallery Read digital editions of Investment Advisor Magazine Tax Facts Get clear, current, and reliable answers to pressing tax questions
Luminaries Awards

Industry Spotlight > Broker Dealers

We’re Back Baby!

Your article was successfully shared with the contacts you provided.

Phew! We made it back, finally. I’m talking about the DJIA, of course. After years and years of giving us absolutely no comfort at all, the DJIA is back in record territory (assuming no great market collapse between now and press time).

Remember the good old days when the DJIA was hitting new records seemingly every day? Of course you do. The money was flowing and every move you made for your clients was golden. Life was good. And then, suddenly, it wasn’t.

All those years of smooth sailing got wiped out by one big hurricane. For investors near retirement it was an especially terrifying blow. This financial storm blew major damage to nearly all of us.

The industry veterans had seen markets go up and down. They’ve all had plenty of clients lose money before. They told themselves, “We’ve been through this before, and we can get through it again. Stay the course.” The old-timers preached patience to all the young whippersnappers.

And then, the bottom fell out.

Investors started to learn that the very industry they had trusted with their life savings was the very industry whose own greed and stupidity was about to bring us all to our knees.

Portfolios were cut in half. Bonuses were lost. Long-time mainstream financial institutions vanished. Thousands and thousands of jobs and promising careers got flushed down the toilet. And it was the financial industry’s entire fault. Ouch.

I knew this crisis was serious when one broker-dealer was forced to cancel its previously scheduled broker “awards trip” to Las Vegas. As word of this trip became public, newly poor investors began gathering rope and looking for tall trees. The firm’s decision to scrap the outing was wise.

That started an avalanche of trip cancellations. There wasn’t a financial advisor in the world who wanted to get caught doing the chicken dance in Maui while his clients were home applying for food stamps. It’s one thing to recommend an investment that loses money. It’s another thing to create the investment, sell it and then mismanage it.

I drag you through this quagmire again, not to depress you but as further evidence that the good old days are back upon us. The following is my accidental research.

I called a broker friend of mine, Matt, recently. One of our mutual friends had gotten a new cell number and I was trying to get it. Matt was just returning from a due diligence trip to California. I pressed him for details, “Did you learn anything new about amortization table calculations used for an immediate annuity?”

Matt replied, “The steak house they took us to before the Lakers game was great! The wine was flowing.”

“Sounds like money well spent,” I said.

He gave me our buddy’s new phone number. He then started to complain that he was only going to be home three days before he had to go to the Dominican Republic for some awards trip he had won.

When I got home, I called our mutual friend Tom. Tom is in the biz as well. He’s my one big-shot executive friend. When I spoke with his secretary, she told me he was in Fiji hosting an awards trip. A tough gig, but somebody’s got to do it.

Let me be the first to welcome you back to the good old days. As we all know, the bull market has finally scratched and clawed its way back to new heights. This climb (or re-climb) has allowed the excesses of our industry to begin returning as well.

With the awards trip season in full swing, it’s back to business as usual. Enjoy it. Don’t forget to pack the sunscreen.


© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.