In large, the world of investment sales is so conflicted, self-serving and willfully blind that it frequently doesn’t even see the problems inherent in its business model. While the marketing mantra is ‘advice that helps clients achieve their financial dreams’, the true focus is on the firm’s own operational scale, cross-selling and grabbing an ever bigger “share of wallet” from their trusting, vulnerable and too frequently–gullible customers.
This article (thanks Sam) highlighting the aggressive sales focus at JP Morgan’s Wealth “Manglement” division is pretty typical of the investment sales culture generally. See: Selling the Home Brand
“Everything is scripted for the brokers in an elite group at JPMorgan Chase: the sales pitches; the personal voice mail message; even the preferred desk candy, Glitterati Fruit & Berry.
In a three-inch-thick training manual, the bank, the nation’s largest, details how to recruit clients, pitch products and, ultimately, close the deal — or, as JPMorgan puts it, “get to Yes!”
The manual is part of an intensive, weeklong training course. But it is only the beginning for JPMorgan’s army of top advisers, who are critical to the bank’s rapid expansion into wealth management, a fast-growing and highly profitable business. Interviews with more than 20 current and former JPMorgan brokers, as well as hours of recorded conversations between a former adviser and his bosses, portray a sales-driven culture that is unusually aggressive, even by Wall Street standards.”
(listen to the audio tape clips embedded in the article for real life footage of managers directing and reprimanding their sales force.)
Despite all that has been written and revealed about this business over the years, still today a majority of hardworking, intelligent people continue to take their financial advice from the sales side. They will insist that their broker is “nice” or a “good person”. But will he or she ever tell you something that is in your best interest but hurts their own bottom line? Will they ever move your capital out of harm’s way in a bear market or when risk to capital becomes unreasonably high? What returns did their clients make in 2001-02, or 2008?? In all the glossy brochures and shiny shoes, these are the only things that really matter over time. The rest is merely seductive sales puff.