"It is prudent never to trust wholly those who have deceived us even once."
-Rene Descartes
There is no debate, the reputation of the financial industry has taken a hit since Madoff and the 2008 crisis. I never thought too much about the importance of public trust in the finance industry until a few weeks back.
I was speaking with a friend, he asked me what I wanted to do after leaving college, and I told him I would like to go into banking. He casually responded by saying, "So are you going to see how many old ladies you can f*** out of their life savings?".
I believe that the words someone chooses to use carry weight, joking or not. Needless to say I was taken aback, my friend is someone who is Republican and unbiased towards Wall street (so nobody gets the wrong idea) but does not know very much about the industry. Those were the first words he chose in response to my interest.
Here is a person who could possibly hire a money manager, or invest in a fund. His words say he will think twice before investing his money. His words say that he distrusts the industry. His words say that bankers are unethical and out to steal, and while the statements are bold and do not hold true for the majority of the industry (or so I hope) many other people feel very similar including my own parents.
Volumes on the NYSE are down steadily since 2009, I believe they will continue to decline until trust is rebuilt. While so many people may be doing what is good and right for clients, the crooks shine through. People hear about Madoff or see Gordon Gekko more often than they see the cancer research that is funded, or charity work by banks and individuals.
Without trust, the industry has nothing. Liquidity dries up, volumes continue to decline, and the music stops. In a few years the stigma may fade but the mistrust will linger on in people's minds, and 10 years down the line the can of worms will re open. This is no way to do business. When is it going to stop?
How do we rebuild the trust that has been lost?
For those in the industry: Do any of you see an unethical mentality in co workers?
You raise a good point, but the wealthy have to put their money somewhere. What is the realistic alternative to wealth management services?
Gold and a shotgun
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