“If your proposed marriage contract has 47 pages, I suggest you not enter.”
This quote by Charles Munger hammers home the role of trust in an investment relationship. Michael Kitces of Nerds Eye View wrote a post entitled “What is the philosophy of your financial planning firm? It deals with what an advisor doesn’t believe in and what he/she wouldn’t recommend to clients. Engaging an advisor whose philosophy is based on trust, and who chooses to be a fiduciary for clients has many benefits for the average investor. Unfortunately, most financial advisors are not fee-only RIAs. Those who are only looking to have a “suitable relationship” with their customers may structure their business philosophy in a different manner. Many advisory firms have embraced a culture of sales and monthly quotas. Clearly that is a philosophy, but it is not necessarily a good one for the end user. If you find yourself surrounded by financial types using any of these types of pitches, be very afraid.
1. “Its like a CD.”
2. “Buying on margin will greatly increase your returns.”
3. “This fund did really well last year.”
4. “As long as the music is playing, you have to get up and dance.”
5. “Do you want the confirmation sent to your office or your mansion?”
6. “I have a very strong work ethic. The problem was my ethics in work.”
7. “I’ve got the guts to die. What I want to know is have you got the guts to live?”
8. “Greed is good.”
9. “Don’t pitch the b*tch.”
10. “Screw the credit derivative desk, I don’t understand half the sh*t they do anyway.”
Some of these quotes came from fictional characters from films, such as Wall Street and Boiler Room. Sadly, others were from real people like former Citi Group executive Charles Prince. Unfortunately, many of these have been used by known financial firms throughout the country. Do yourself a favor. Before you invest your hard earned money with any firm, ask detailed questions about their company’s philosophy. To quote Dr. Zaius from the Planet of the Apes, “You may not like what you find.” If they start quoting Bud Fox, or Jordan Belfort, you will have only yourself to blame if things don’t turn out as planned.