Comments on: Wall Street is not made up of "numbers guys"

By: ROSSINDETROIT

ROSSINDETROIT — Wed, 14 Nov 2012 11:52:00 +0000

I read Orzel’s book How to Teach Physics to Your Dog and it’s very good. I didn’t know he was blogging. Looks like I g=have some catching up to do in my reading.

By: hug h

hug h — Wed, 14 Nov 2012 04:40:00 +0000

Forgive me for being a bit smart alecky in my response. Of course I find that problematic. I have worked closely with thousands of advisors in my career and I would estimate that 1 in 5 are up to the standard of integrity and expertise that I would recommend them to a family member. I suspect that you would probably hear a similar percentage from competent trustworthy people with inside knowledge of other fields be they plumbers, car mechanics, accountants, lawyers or doctors. I am sure with time and effort you can do well on your own. I sincerely hope that at some point you are able to work with a really good advisor.

By: Antinous / Moderator

Antinous / Moderator — Wed, 14 Nov 2012 03:38:00 +0000

The point, which you seem determined to miss, is that when I asked, I couldn’t find a single person who knew anyone whom they could recommend. Don’t you find that problematic?

By: hug h

hug h — Wed, 14 Nov 2012 03:09:00 +0000

Ah yes but I suppose it would logically follow that those trusted savvy investor friends and your accountant don’t use an advisor precisely because the only ones they know practice predatory financial counseling. Sorry for them and you. Alternatively, I am full of crap and all advisors practice predatory counseling and you, your accountant and your trusted savvy investor friends figured it out. It’s all a scam and you knew it all along didn’t you? Please don’t tell anyone else, we have children and yachts and such to care for.

By: yetanotherhumanbeing

yetanotherhumanbeing — Wed, 14 Nov 2012 02:36:00 +0000

I’d recommend that anyone with money to invest spend some time researching how markets function. Investing doesn’t have to be rocket science (but it can if you’d prefer it that way) and there are plenty of great online resources out there to give small-time investors all the tools they need to make their own investing decisions. If you can find an adviser you trust, even better. Advisers aren’t seers, however, and very few produce above average returns for their clients. The same can be said of fund managers since the 2008 crisis; most have underperformed the S&P 500 even before collecting their fees.

By: class_enemy

class_enemy — Wed, 14 Nov 2012 02:25:00 +0000

True. If there is one group that’s sleeping very soundly since Nov 6, it’s the big guyz at the Too Big To Fail Five.

By: crash2parties

crash2parties — Tue, 13 Nov 2012 22:26:00 +0000

No kidding. Imagine if the world had no such sociopaths; said horrific decisions would not exist.

By: Antinous / Moderator

Antinous / Moderator — Tue, 13 Nov 2012 21:35:00 +0000

Who else is going to slaughter the innocent to make a quick buck? What kind of a society would we have without that?

By: Antinous / Moderator

Antinous / Moderator — Tue, 13 Nov 2012 21:14:00 +0000

Yes, but my trusted friends who are fairly savvy investors, as well as my accountant, don’t know anyone who doesn’t practice predatory financial counseling.

By: Origami_Isopod

Origami_Isopod — Tue, 13 Nov 2012 17:58:00 +0000

“Unfortunately, we need the sociopaths because we actually do need some people like that who can take horrific decisions and not be haunted by them.”

Citation needed.

By: hug h

hug h — Tue, 13 Nov 2012 17:15:00 +0000

I would start by getting referrals from several trusted friends, then (as Frank266 suggests below) do an online background check with FINRA. Finally interview a few advisors, inquire about their experience, philosophy, typical client profile and compensation options. My view is that the more questions an advisor asks YOU in the first appointment the better. They should be gathering information about your goals and objectives, investment experience, resources, risk tolerance etc.

A good advisor will encourage you to save and invest early, put aside an emergency fund and set you on a path toward specific financial goals. This will probably involve living below your means. Most important of all an advisor “will hold your feet to the fire” when market conditions are difficult. Emotions and investing are a natural yet toxic mix. I often tell people that the most valuable behavior I have learned from my years of experience in the business is practicing “benign neglect” of my investment portfolios. I have a well diversified, professionally managed and indexed portfolio. In a typical year I make a few minor adjustments and never watch the market day to day. I do make an occasional bold move for a portion of my portfolio- usually when the majority of people are panicking and running for the exits.

By: Funk Daddy

Funk Daddy — Tue, 13 Nov 2012 17:08:00 +0000

I thought people knew Romney wasn’t a numbers man simply because he never produced any. Platitudes about numbers aren’t numbers.

By: Chuck

Chuck — Tue, 13 Nov 2012 16:19:00 +0000

In today’s idiocracy, a “number’s guy” is anyone who can do basic math. I’ve seen people type a column of numbers into a spreadsheet, then get out a calculator to add up the numbers and type in the total at the bottom. It doesn’t take a math genius to realize that, on Wall Street, the brokers have the advantage, and they will screw you at every opportunity.

By: gypsydoctor

gypsydoctor — Tue, 13 Nov 2012 15:52:00 +0000

Of course they are not math guys. It’s a pretty good rule of thumb that the top guys in any business are SALES people. Doesn’t everybody know that?

By: sdmikev

sdmikev — Tue, 13 Nov 2012 15:45:00 +0000

Sadly, they really don’t want to talk to you or any of us. If you are making regular contributions to your IRA (and you should be) then start by moving it into something like a target fund that has (roughly) the year you hit 60 in the name. They are invested in a changing mix based as the years go by for appropriate risk. Mine is 2025 Target at Schwab.
60 because one can start taking out money from their IRA at 59 1/2 without penalty.

By: Frank266

Frank266 — Tue, 13 Nov 2012 15:38:00 +0000

Look for a “fee-only” financial advisor. That means they don’t work on commission.

By: Frank266

Frank266 — Tue, 13 Nov 2012 15:36:00 +0000

One thing to do is to check an advisor’s SEC filing (easy and free to do online – just google SEC advisor search). There you’ll find a complete list of complaints and disciplinary actions, if any, against the advisor in question.

By: GlyphGryph

GlyphGryph — Tue, 13 Nov 2012 15:16:00 +0000

“Yet with a little bit of effort you can certainly find an financial advisor who genuinely desires to assist clients with good advice and planning”

Here’s the clincher, though – the part I’ve never been able to figure out. How? You say “with a little bit of effort”, but what IS the effort needed? How can I find the good guys? Once I’ve found someone, how can I tell I’ve gotten one of the good guys?

Honestly, it seems like it would take more than “a little bit of effort” – it seems like it would take a lifetime of involvement with the sort of people involved. Without that, I’m essentially gambling – that whoever I found is honest more than convincing, and that whatever standards of judgement I chose are accurate rather than mistaken.

By: Beth Morgan

Beth Morgan — Tue, 13 Nov 2012 15:13:00 +0000

It’s true. My husband was an investment banker and I’m in marketing, but I trained his analysts how to do more complex numbers crunching. And he’s one of the more numbers-savvy bankers.

By: Beth Morgan

Beth Morgan — Tue, 13 Nov 2012 15:09:00 +0000

No, it isn’t. But I worked with them when I was at a nonprofit and I thought they were awesome.

By: Speakatus Sparkatus

Speakatus Sparkatus — Tue, 13 Nov 2012 14:42:00 +0000

Vanguard is *not* a non-profit.

By: Tom Tjarks

Tom Tjarks — Tue, 13 Nov 2012 14:36:00 +0000

And when I see the words, I have a cunning plan…, my brain reads the sentence in Baldrick’s voice.

By: Christopher

Christopher — Tue, 13 Nov 2012 14:21:00 +0000

Monkeys on crack would actually do a better job than the guys currently working Wall Street, since they consistently fail to turn a profit even half the time.

By: Nicholas MacDonald

Nicholas MacDonald — Tue, 13 Nov 2012 13:40:00 +0000

Have you looked at investing through Vanguard? They’re known for high ethical standards, and all the company’s funds are investor-owned (it’s essentially a non-profit investment management firm).

Also, look for advisors who hold the CFA designation; the Chartered Financial Analysts Institute is pretty good about policing their own.

There are plenty of people in the investment industry who aren’t complete wankers, if you know where to look…

By: Marc Mielke

Marc Mielke — Tue, 13 Nov 2012 13:23:00 +0000

Why? That’s been my assumption from the start. They TELL everyone how smart they are, but the laws are so obviously in their favour that you could give their job to a monkey on crack and it’d turn a profit half the time.

By: jimdigritz

jimdigritz — Tue, 13 Nov 2012 13:08:00 +0000

Far be it from me to get in the way of a good old bankster bashing session, however you also have to (for balance) remember that the models that these ‘masters of the universe’ used to buy sell derivatives (and indeed some of the more complex derivatives themselves) were being created by Phd math geeks in the banks Quant teams. Numbers guys, absolutley – real life pragmatists – not so much.

It is really a disconnect between the government’s oversight (Glass Steagall anyone?) and pure greed which itself is an option because of the government’s implicit backstop of the taxpayer to bail out these risk takers.

By: chris coreline

chris coreline — Tue, 13 Nov 2012 12:39:00 +0000

that’s a bit rich, its making my head smart.

By: Scurra

Scurra — Tue, 13 Nov 2012 11:33:00 +0000

The problem is that those guys have no trouble sleeping either.
Unfortunately, we need the sociopaths because we actually do need some people like that who can take horrific decisions and not be haunted by them. The difficulty is that the rest of us then abrogate our responsibilities to contain them (often by pretending that we live in democracies so the “system” will fix everything…)

By: peregrinus

peregrinus — Tue, 13 Nov 2012 10:05:00 +0000

To see how it works, play the name game – pick up on a finance world name, ‘Shapiro’ is a good one, and then google “bank” + [name]. Maybe choose a name from a well-known family like “Kronenbourg”.

After a few tries and some alterations you start to see how common it is that famous surnames from all fields end up in banking, with a public image of some sort or another.

If you’re hot at the game, you can start to spot the network, and even the order people got hired in.

Makes sense, when you’re in you bring in your friends and family.

But doesn’t speak well of meritocracy – that’s a silly concept made up to ensure the flow of drones to do the actual dirty work (eek! Excel spreadsheets for the deal! Yuck!)

By: TheMudshark

TheMudshark — Tue, 13 Nov 2012 09:16:00 +0000

I have come to terms a while ago with the fact that Wall Street guys, politicians, all the rich and powerful people that pull the strings in our world, are pretty much the same bunch of dumbasses that the general population is. Rich, powerful dumbasses with no one to hold them back. And somewhere among this bunch of omnipotent dumbasses, sometimes, there are a few good people. Yay!