November 30, 2025 • 39 mins
Chris Markowski, the Watchdog on Wall Street, delves into the intricate relationship between Wall Street, the media, and the public. He discusses the lack of coverage on Wall Street fraud by mainstream media, the influence of advertising on financial reporting, and the implications of having 'too big to fail' banks. Markowski also highlights the challenges faced by smaller financial advisors and the ethical dilemmas within the industry. He emphasizes the importance of building wealth through sound financial practices and the reality of misconduct among financial advisors.
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Episode Transcript
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Speaker 1 (00:07):
Well knowe altered investment banker, consumer advocate, analyst, trainer. Chris
Markowski is the watchdog on the Wall Street. Do you
want to answer exposing the lines and myths that the
big brokerage firms, the mainstream press, and the government are
pushing to keep Americans away from financial freedom. You can't
(00:29):
handle the true proof bringing America the truth about what
really happens in the financial world.
Speaker 2 (00:35):
Ladies and gentlemen. We're not here to indulge in fantasy,
but in political and economic reality.
Speaker 1 (00:40):
This is the watchdog Wall Streets.
Speaker 3 (00:45):
All right, Welcome back, everybody. All right, I wrote this down.
Speaker 1 (00:51):
I have.
Speaker 2 (00:51):
One of the things that I do a poor job
of when it comes to this program is uh, I
promise I'm going to get this something later on the program,
and again I get scatter brained. I get off the
beaten track. Then when I do that, and rightfully so,
people email me is, well, you.
Speaker 3 (01:10):
Were saying you were gonna talk about this and you
never got to it.
Speaker 2 (01:12):
And then I'm gonna answer a lot of emails. So
I again, I wrote this down earlier on the program.
I said I was going to talk a little bit
about the tie ins and what we learned about why
the mainstream media, why the mainstream media does not cover
Wall Street fraud and scams. They completely ignore it. And
(01:37):
again I remember, I remember when the you know, dot
com collapse, the blow up, the financial crisis, and guys
that put themselves out there is like populist hosts, guys
like Bill O'Reilly wouldn't touch it, wouldn't touch going after
(01:58):
Wall Street and there involvement in all of these ripoffs
and scams. You want to know why, well, go to
commercial break. Who is running advertisements for a period of time.
Speaker 3 (02:14):
Period of time is not as many anymore, There really isn't.
Speaker 2 (02:18):
And again I think one of the reasons is maybe
a little bit more on sports. Just the way that
people consume media. It's it's much different, but they still pay.
You know, you're seeing the advertisements. You see it in
their digital you'll see it online. You might see if
you know, go and you watch, you want to watch
(02:39):
a news story, you might see a clip from one
of the big firms there.
Speaker 3 (02:43):
They're still paying. But what are they paying for?
Speaker 2 (02:49):
You know, back back you know two thousand and four,
two thousand and five, there was a mind numbing excess
of brokerage commercials on TV.
Speaker 3 (02:59):
And again, I mean they made me sick to my stomach.
But at the time it was interesting.
Speaker 2 (03:05):
I took a look and I saw that the advertising
the firm spent was up almost thirty percent year over
year twenty four.
Speaker 3 (03:12):
To twenty five.
Speaker 2 (03:14):
And again, you take a look at the numbers today.
Even though they're not getting that much traction. You know,
people are not watching must see TV, not as much
television out there, they're still buying. They're still buying these ads.
And what was interesting about these ads and still to
this day.
Speaker 3 (03:32):
There's no call to action, there's no call to action.
Speaker 2 (03:38):
It's it's some you know, commercial trying to you know,
jerk at your you know, your emotions or whatever it
may be. But anyway, anyway, I remember at the time,
at the time it was an advertisement by Morgan Stanley.
Was they called their ad campaign the at your Side campaign,
(03:59):
and this campaign Morgan Stanley, you know, trying to rope
in customers by getting them to believe that a super
friendly Morgan family financial advisor is actually a trusted member
of the family. The wedding reception commercial has to be
one of the greatest puke inducers ever. Yeah again, they
(04:20):
had a guy there that would basically give it a
speech at.
Speaker 3 (04:24):
This guy's daughter's wedding. Oh well, you know, how about
how about some food? How about some comments from their dad?
And he was kind of this weird guy.
Speaker 2 (04:31):
And it was like the guy his dad came over
and gave him this weird look even in the commercial.
Speaker 3 (04:35):
I don't know, I found the whole thing weird.
Speaker 2 (04:38):
Okay, it will be nice to see a little bit
more time, I said, more honesty in their advertising. You know,
father explaining to her daughter that her wedding will be
held down at the ihop because he lost a small
fortune on Morgan Stanley's hot stock tips. Or better yet,
how about a man remodeling his home by wallpapering his
(04:59):
bathroom with worth of stock certificates courtesy if he is broker.
Speaker 3 (05:03):
How about all that garbage at Wall Street was shoving
down your throat during COVID. Oh yeah, these are disruptor companies. Yeah, disruptor.
You're gonna get into ease or spacks or other garbage.
All right again, how about this one?
Speaker 2 (05:18):
How about an advertisement with a very impressive looking stock
analyst telling his salesforce and his firms investors how wonderful
and terrific. The prospects for x y Z Corporation. Cut
to happy hour at the local watering hole. Later in
the day, the same analysts, having drinks starts boasting to
his buddies about what a dog x y Z is.
Speaker 3 (05:39):
But who cares the banking fees paid for my ferrari?
Speaker 2 (05:45):
Anyway, Why why did did you think that these Do
you think that these firms generate Do you think that
they generate business from these commercials? Now, Morgan stand is
a white shoe firm, Goldman Sacks white shoe firm.
Speaker 3 (06:06):
You you have to have.
Speaker 2 (06:07):
A significant amount of money to even walk in the
door at any of those places. Do you think that
those people are looking at a commercial saying, Yeah, I'm
gonna go to Morgan Stanley, I'm gonna go to Uh,
I'm gonna go to Goldman Sachs.
Speaker 3 (06:25):
No way, no, how that gonna happen.
Speaker 2 (06:31):
The reason, okay, we discovered this, the reason why they
spend all of this money on advertising is guess what,
to buy them?
Speaker 3 (06:41):
Good press? To buy them good press.
Speaker 2 (06:45):
So I got a hold of one of Morgan Stanley's
advertising contracts and it said this, and I quote in
the event, and the event that objectional editorial coverage is planned,
Morgan'sley's ad agency must be notified as a last minute
change maybe necessary.
Speaker 3 (07:05):
If an issue arises after hours or a call cannot.
Speaker 2 (07:08):
Be made, immediately cancel all Morgan Stanley ads for a
minimum of forty eight hours.
Speaker 3 (07:15):
Yeah right again.
Speaker 2 (07:18):
I go back to that great television shows mad Men,
and one of the guys from the added executive boasting
that he could tell the New York Times to print
mind comf on the front pages and they would do it.
Speaker 3 (07:32):
He spends so much money in advertising in the New
York Times.
Speaker 2 (07:36):
They're buying great editorial coverage and they still do.
Speaker 3 (07:46):
That's why.
Speaker 2 (07:48):
That's why these stories don't get covered. You know how
many times I've been asked about that over the years.
People will listen to this program, or I'll get an
email basically question me, that's not real. That could be real.
If that was real, it would be on the news.
Naive How naive people can be.
Speaker 3 (08:13):
And it's it is what it is people.
Speaker 2 (08:16):
I mean again, I do the best I can I
do anyway, Ah, you know what I talk a little bit,
You know, why not? We're talking about the big firms, right,
now and I don't care because I got this as well.
You're like, I can't believe, can't believe these big firms
haven't sued, you haven't gone after you off all the
stuff you say about them. I say, you know, I'm
(08:37):
an equal opportunity basher, I go after everybody. I'm just
you know, I don't lie. What are they gonna go
after me for? Did I say something that's not accurate?
Have I said something ever on this program that hasn't
been true?
Speaker 3 (08:49):
What are they to do?
Speaker 2 (08:52):
So?
Speaker 1 (08:52):
For? What?
Speaker 3 (08:53):
Being honest? I get a kick out of the ridiculous
mission statements from these various different big firms. It is
big ones also.
Speaker 2 (09:09):
Edward Jones of the World and these other ones as well,
JP Morgan Chase. Our integrity and reputation depend on our
ability to do the right thing, even when it's not
the easy thing, and there's Goldman Sachs, No financial incentive
or opportunity, regardless of the bottom line, justifies a departure
from our values. Right or the talent and passion of
(09:33):
our people are critical to our success. Together, we share
a common set of values rooted in integrity and excellence.
As Morgan Stanley and then there's merilyns. The interests of
our clients must come first. They actually say these things,
they actually put them in their mission statements. But again,
(09:55):
you could say whatever you want. Last time I checked action.
Speaker 3 (10:02):
Actions. How you what you do, okay is what matters.
You just say whatever you want.
Speaker 2 (10:10):
You can have your ad agency, you can have your
PR people. You could have put out whatever BS mission
statement they want. But you, guys, you don't operate this way.
And you know you don't operate this way. You know this,
this this part of the problem.
Speaker 3 (10:26):
Again.
Speaker 2 (10:26):
I talked about talked about Glass Stegel, right, and they
repealed Glass Steagel and what it did in nineteen.
Speaker 3 (10:35):
Forty seven, It's true.
Speaker 2 (10:36):
Nineteen forty seven, the US government sued wait for it,
the top seventeen investment banks seventeen for violating anti trust laws,
basically collusion. The Justice Department, in their suit alleged that
the investment firms had created and integrated overall conspiracy and
(10:58):
combination beginning in nineteen fifteen and in continuous operation thereafter,
by which they developed a system to eliminate competition and
monopolize the cream of the business of investment banking.
Speaker 3 (11:13):
Now get your arms around this seventeen seventeen. Okay, what
do we have today? Do we even have a handful? Anyway?
Speaker 2 (11:28):
The US argued at the time, at the top Wall
Street investment banks, including Morgan Stanley, who was the lead defendant,
and Goldman Sachs, had basically crafted a type of cartel
which was able to set prices charged for their services
such as securities, underwriting, mergers acquisitions. The firms colluded to
(11:50):
essentially box out any other smaller banks. It was discovered
that the big investment firms would strategically place their partners
on the client's board of directors. Again, nothing's changed. This
happened all the time during the nineteen nineties.
Speaker 3 (12:07):
We covered it.
Speaker 2 (12:09):
By doing this, it placed their firms in a variable,
very favorable position to win and basically to win, and
not actually know where the business was coming from and
how to go about winning it.
Speaker 3 (12:19):
They knew everything. Now, think about that.
Speaker 2 (12:23):
I could only wish there were seventeen investment banks competing
against one another today. There was, There was quite a
few more back in the nineteen but there wasn't even seventeen.
Speaker 3 (12:34):
Then.
Speaker 2 (12:37):
All we have is too big to fail. All we
have is too big to fail. When banks are too bad.
And again this I'm going to go to Barack Obamas.
This was telling Barack Obama's Attorney general, remember Eric Holder.
Eric Holder was being it was actually during a Senate
(12:58):
hearing and two thousand thirteen, and he said, when banks
are considered too big to fail, it's difficult to prosecute them.
Speaker 3 (13:08):
If we do bring a criminal charge.
Speaker 2 (13:09):
It will have to be it will have a negative
impact on the national economy. Again, what does that lead
us to what we've been talking about for years and
years and years the watchdog on Wall Street, access of evil,
big business politicians and the media working hand in hand.
If all of these big banking institutions are too big
(13:32):
to fail, what does that mean they can do whatever
they want. They can do whatever they want.
Speaker 3 (13:43):
I just thought about this. There was again because I
got a kick out of Greek mythology.
Speaker 2 (13:47):
There's a I forgot the name of the show quite frank,
It was okay, but I like Jeff Goldblum as well.
Speaker 3 (13:52):
Basically is the show about the Greek gods.
Speaker 2 (13:57):
Being around kind of today and you know, well not today,
but it was kind of like an alternative universe where people,
you know, still worship them and they were just awful.
Speaker 3 (14:07):
You think of with the Greek gods, I mean just
they were just there.
Speaker 2 (14:09):
They were not they were not nice at all. That's
basically what we have right now, you know. But they
were Greek gods, they were omnipotent. They could do whatever
they want. That's what these big banks are. Again, what
are you gonna do to them?
Speaker 3 (14:25):
You're gonna do them.
Speaker 2 (14:26):
Oh and we got caught. Okay, well we'll pay a fine.
We'll pay a fine, and we go back to doing
what we were doing before.
Speaker 3 (14:34):
See.
Speaker 2 (14:35):
You know, there was the president, well the former president
the Federal Reserve Bank of Dallas, Richard Fisher. He pointed
out another example the problem with too big to fail,
something that we've pointed out as well.
Speaker 3 (14:47):
It's not fair. There's an when you're too big to fail.
Speaker 2 (14:51):
That means what that means you have access to capital
at a price that nobody else can get. Why because
you can't fail, there's no risk, he said, The megabanks
can raise capital more cheaply than smaller banks. Studies, including
those published by the IMF, estimate this advantage to be
(15:11):
as much as one hundred basis points. That's huge, quite frankly,
and let's be honest, what happened, What happened to all
of the small banks?
Speaker 3 (15:24):
What happened to most of the community banks out there?
Where did they go?
Speaker 2 (15:29):
They couldn't compete, They couldn't compete, so they sold out
to the bigger banks and they are no longer.
Speaker 3 (15:38):
Again. Is this capitalist? No, it's not.
Speaker 1 (15:43):
It's not.
Speaker 2 (15:44):
When when the government gets this this far in with
an industry, when it gets this far, it's it's basically
socialists to some degree, quite frankly, is exactly what it is.
Speaker 3 (15:59):
It's basically a socialist empire. Gotta take a break.
Speaker 2 (16:04):
Watchdog on Wallstreet dot com, Watchdog on Wallstreet dot com again.
Become a part of the Watchdog on Wall Street family,
our our personal CFO program, work with the Markowski family,
our podcast, all sorts of great stuff. Watchdog on Wall
Street dot com or give us a call eight hundred
four seven.
Speaker 1 (16:26):
Stead This is the Watchdog on Wall Street.
Speaker 3 (16:52):
Welcome back, Welcome back anyway. People. It's a it's anfortunate but.
Speaker 2 (17:01):
You know, many people say, I can't I can't work
with Goldman Sachs, I can't work with Morgan's. These are
you know, for big you know investors out there and
they've got the smaller ones out there, the Edward Joneses
of the world.
Speaker 3 (17:13):
The America Prize is out there, all right.
Speaker 2 (17:19):
We've been trying very very hard, very hard because again,
I have a lot of a lot of listeners, a
lot of advisors listen to this program that work.
Speaker 3 (17:29):
For those firms. It's like the Hotel California.
Speaker 2 (17:36):
They they can't they can't get out the type of
contracts that they put them in. They're not happy, they're
they're not happy in the slightest about what they have
to do about the business, who they're working for, how
things are done. But it making it very very difficult
for them to leave. And again, these firms come after
(17:57):
I know it's there were Jones folks, and they're commercials
and all that stuff. Oh yeah, everybody knows your name.
Speaker 3 (18:06):
Yeah.
Speaker 2 (18:07):
Well again, we've covered this here on the program. It
was just a couple of years ago where we found
out that they were starting to do the culling of
the clients.
Speaker 3 (18:19):
Oh yeah, yeah, firms do this.
Speaker 2 (18:21):
They again, they take a look at these smaller, less
worthy clients and then they send them off to some
sort of bloody call center.
Speaker 3 (18:32):
Hell yeah, you don't have.
Speaker 2 (18:36):
Enough money with us, You're not worth, not worth our
time and trouble. And again, for many of these advisors,
they don't want to do this to their clients.
Speaker 3 (18:45):
They don't have a choice. They don't have a choice. Again,
I guess over.
Speaker 2 (18:53):
At Edward Jones when I was covering this couple of
years ago, anybody who had less than fifty thousand dollars
to be shipped off to a call center so their
account could be handled by some sort of incompetent boob. Okay,
how do I know that they're incompetent, Well, if they
had the slightest bit of acumen, I'm sure Edward Jones
(19:15):
wouldn't have them handling accounts that they really didn't want.
Speaker 3 (19:19):
And the other thing is, people, I've been around the
block about a.
Speaker 2 (19:23):
Thousand times, and I've seen this movie before, and what
happens on every occasion is the incompetent call center advisor
puts the expendable client into a high commission, low performing
product until they decide to transfer out, Shurn them and
burn them until they leave, bang them out for the
most you can, and then.
Speaker 3 (19:43):
They will go problem solved, Problem solved.
Speaker 2 (19:50):
There's a disgusting industry practice that quite frankly is encouraged.
It's actually encouraged handle discussions. At every industry conference that
I have ever attended, I don't go to anymore, they
have a breakout session on practice management where advisors are
(20:11):
told fire all of your smaller clients so you can
focus all your attention kissing the buttocks of the ten million.
Speaker 3 (20:18):
Dollar plus crowd. We don't operate in that way. It's wrong. Okay,
it's not even that's not personal strictly business. No, it's not.
Speaker 2 (20:32):
Okay, it's personal, and it's wrong. Watchdog on Wallstreet dot Com.
Watchdog on Wallstreet dot Com will be back.
Speaker 1 (20:41):
Chris Markowski is the watchdog of all storms, the only
man who is taking on the Walls Street establishments. You're
(21:03):
listening to the Watchdog and Wall Street with Chris Markowski.
Speaker 2 (21:15):
Since the beginning of this show, I have I've got
three three emails, I do not three emails from various
different private equity companies asking to bias. Here's the latest one, Chris,
are you free for a few minutes to connect and
discuss the acquisition options for your ri I A. I'm
(21:38):
working with a solid group that's paying top revenue and
ebidah multiples depending on the type and skill of the firm.
Noose strings attached. Just to call to get familiar with
your business and requirements in detail.
Speaker 3 (21:49):
I can tell you if we can get your number
or not.
Speaker 2 (21:55):
Yeah, yeah, go take a long walk off the short pier. Sorry,
you're not going to churn and burn my clients anyway. Anyway,
back to back to the smaller firms, and again this
is most certainly a problem with the industry.
Speaker 3 (22:12):
That I saw this happening a mile away. I saw
it again.
Speaker 2 (22:18):
I saw it when I first started working in the business,
you know, way way, you know, thirty plus years ago.
You know, I saw what was going on at Merrilynch
and these other firms saying, hey, listen, you know, unless
you have X amount of dollars, we're not going to
do business with you. And I think again, I, you know,
(22:38):
ask questions. When I was a kid, I came from
you know, monest means, you know, middle class family upstate
New York. And for the life of me, I was like, why,
why wouldn't you want to help people if they need help?
Wh wouldn't you want to try to help people build
wealth and.
Speaker 3 (22:53):
Then a good thing. Now they want to be bothered.
What about it?
Speaker 2 (22:58):
We only deal with people that are already have money. Listen, Okay,
you know we do too. Okay, we do too. We
accounts that come into Markowski Investments, you know, tens of
million dollars.
Speaker 3 (23:12):
Yeah.
Speaker 2 (23:14):
Yeah, Again, they're a different scenario than people that were
trying to build wealth for obviously a little bit different.
But why would I not help somebody out? Why would
I not try to build somebody wealth over time? I said,
those are stories that are in my book work, time
(23:34):
and effort. These are people that I've known for decades
and watch them build their businesses up, build their wealth
over time.
Speaker 3 (23:41):
You know how satisfying that is.
Speaker 2 (23:46):
And again it want no part of that, because again
you Wall streeted it changed. It changed into a basic
selling machine, selling machine of you know, certain types of
financial products can't be bothered with trying to help people
build wealth. And that's when you started getting some of
these other smaller firms out there that started marketing. They
(24:09):
want to call it that you want the mass affluent crowd.
I don't know what the exact terminology they're using nowadays.
The Americ Prizes, the Edward Jones, But again, they can't
help themselves. They can't help themselves. You know this program
I highlighted a couple of years ago at Edward Jones.
Speaker 3 (24:31):
It was called Edward Jones Connection.
Speaker 2 (24:34):
It was being sold to advisors as a time saver,
time saver for prospecting and servicing larger clients. Again, we
found out that they received eighty two million dollars in
payments from several different mutual fund companies. And again the
(24:54):
fee structure gave their advisors greater compensation for hawking poorly
performing funds over stellar performers.
Speaker 3 (25:05):
Okay, this practice is called it, and it's a screwed
up practice.
Speaker 2 (25:07):
Called revenue sharing, where fun companies would compensate broke wig
firms more in order to induce them to sell their products.
Hey again, I get it all the time. I get
it all the time. Oh well, I will give you
money for this marketing thing. You want to hold, this event,
you want to go on vacation, We got it, will
(25:28):
take care of you. So you had Edward Jones brokers
pushing these preferred funds over better performers. Some of the
most hideous performing fun families offered the most lucrative of incentives.
Speaker 3 (25:45):
Go figure.
Speaker 2 (25:47):
Here is an actual quote, Okay, this is from an
Edward Jones and he was doing an interview with Advisor
Hub and he said that the firm, and I kid
you not, was much like the Soviet and that they
are in the business of pushing products and policies that
benefit the general partners first. And I quote in reference
(26:10):
to Jones being like the USSR. There's nothing going on
at that firm that is in the best interest of
the client and the poor folks they hire with zero
financial experience lap up the kool aid without question because Jim,
Bob and Dwayne Jones make you feel so gosh darn good.
For example, their advisory solutions, their manage account program where
(26:33):
they are double dipping with their own funds. What Edward
Jones is doing and is allowed to do is criminal.
They are firing a lot of great advisors. Great advisors
are let go because they do the right thing by
discounting fees for clients, are selling a bond the correct way.
How about lavish five star trips that the firm sends
(26:56):
ninety percent of their advisors that are paid for by
the mutual fund companies who pay to be in the
Jones system.
Speaker 3 (27:05):
And again, core values look up core values, Edward Jones.
Speaker 2 (27:09):
Our clients' interests come first, really really, so sending your
your unworthy clients to call center hell and pushing crappy,
high commission financial products on your clients is in their
best interest?
Speaker 3 (27:22):
Really? Can people wake up? Know who you're doing business with?
Got to take a break. Watchdog on Wallstreet dot com.
Speaker 2 (27:32):
Watchdog on Wallstreet dot Com again our Personal c f
OH program. Become a part of our personal c f
O program. Sign up for our podcast All sorts of
great stuff there at our site, Watchdog on Wall Street
dot Com.
Speaker 3 (27:47):
We'll be back. Why crowd.
Speaker 1 (28:00):
Yeah, you should believe in math not magic. You're listening
to the Watchdog on Wall Street with Chris Markowski.
Speaker 3 (28:13):
Look about everybody, Welcome back.
Speaker 2 (28:15):
It is the Watchdog on Wall Street show, our Markowski
Investments personal CFO program. Yeah, I've oftentimes again we work
on the fundamentals all the time. Here on the program,
we go over our our process and how we build wealth.
And like I said earlier, there's no magic, there's no trick.
(28:36):
It's just eternal wisdom. Quite frankly, that's it.
Speaker 3 (28:41):
That's it.
Speaker 2 (28:42):
You know, the simple rules of the road that we
follow that work the personal CFO program. Again I I
thought about this, I came up with I had to
be like two thousand and four, two thousand and five,
I actually started writing a side little uh newsletter entitled
Personal CFO. What we offer to all of our clients
(29:07):
is the same type of services.
Speaker 3 (29:10):
Not it's not totally true.
Speaker 2 (29:12):
Not the same type of services, but the same important
services in the sense that if you need legal we
can help you with that. You need accounting, we have
the best in the business, and of course our money
management services.
Speaker 3 (29:26):
Now again it's what a family office would offer. Okay.
Speaker 2 (29:30):
What we don't offer as far as a family office
is concerned is no, no, no, I'm not you know,
I'm not making hotel reservations for you. You know, if
you've got some brady kid, I'm not bailing them out
of jail. I'm not gassing your boat up over the
course that we.
Speaker 3 (29:45):
Can actually we we actually get that.
Speaker 2 (29:48):
You know sometimes that people you know, well guys serious money.
Speaker 3 (29:53):
Well, well can you guys do some of this stuff? No, no,
that that's that's not what we do.
Speaker 2 (29:59):
Okay, We're not in the butt kissing business at Markowski Investments.
Speaker 3 (30:04):
But again, you gonna become part of our personal CFO program.
Speaker 2 (30:06):
You're gonna learn how to navigate financial storms, corrections, volatility,
learn how to avoid serious risk, including stuff the old
black swans and things that come out of nowhere.
Speaker 3 (30:19):
How you handle that.
Speaker 2 (30:22):
Thing. We often talk about here on the program, again
and again and again.
Speaker 3 (30:26):
Conventional wisdom. Conventional wisdom.
Speaker 2 (30:29):
Oh, it's gotta be right, because everybody's thinking it's this way.
Speaker 3 (30:33):
It has to be this way.
Speaker 2 (30:35):
Discerning the difference between the conventional wisdom of the day
and the reality of the terrain. Where to find, where
to find those great safe yields that you can have,
letting compounding work its magic, how to apply them, and
how our our clients have positioned themselves for success through again,
(31:00):
some of the markets histories, most turbulent markets, going back
over three decades. How do we do it? How don't
we put I get her all the time? Okay, And
it's simple. I'll show you our process. I'll show you
our process. And again it's the same for everybody. Everybody's
portfolio is different because everyone's unique and different, but the process.
Speaker 3 (31:22):
Nonetheless is still the same. I have to take a break.
Speaker 2 (31:26):
Watch Dog on Wall Street dot Com, Watchdog on Wall
Street dot com again. Sign up for a personal CFO program, podcast, newsletter,
all sorts of great stuff.
Speaker 3 (31:34):
Watchdog on Wallstreet dot com. We'll be back.
Speaker 1 (31:40):
You're listening to the Watchdog on Wall Street bringing America
(32:00):
financial freedom, one listener at a time. You're listening to
the Watchdog on Wall Street with Chris Markowski.
Speaker 3 (32:10):
Got sad too.
Speaker 2 (32:11):
You know, I feel horrible and I just got a
lot of these these advisors they want out, they don't
want to work at these firms anymore. And again, they
sign their name, they sign their name on these contracts,
and you know, they get laid off, they can't get
back into the business or a certain period of time.
And if they do, they're not allowed to contact any
(32:33):
of their old clients. If they do, the firm is
going to come after them. And again, the firm's got
a lot more money. The firm's got a lot more money.
They got much bigger lawyers, and they go after you.
Make your life absolutely miserable. And again, yeah, did anybody
ever yody open up an account at Edward Jones or
Amraprize based u pecan the fact that they're Edward Jones
(32:55):
and Amraprize seriously ridiculous quite but anyway, anyway, let's share
with you this too. I do a lot of obscure
reading on studies and whatnot. This came from a study
it was called the Market for Financial Advisor Misconduct and
stuff that I read.
Speaker 3 (33:17):
In the Journal of Political Economy. I'm a dork anyway.
Speaker 2 (33:21):
The average, the average brokerage firm, at least eight eight
percent of the brokers that they have have a record
of severe wrongdoing. Now again, I want you to think
about that for a second. If you went to a
hospital and you found out that eight percent of the
(33:44):
doctors that work with that hospital have a done severe wrongdoing,
I think you probably look to go somewhere.
Speaker 3 (33:51):
Anyway. Of that group of brokers or advisors.
Speaker 2 (33:57):
Fifty actually maintained their job after being caught. Now, the
ones that were terminated were hired, you know, the half
were hired at another firm. So seventy five percent of
brokers that were caught severe misconduct ripping off clients are
(34:23):
still managing money. Of that group, thirty eight percent we're
caught screwing investors over again.
Speaker 3 (34:36):
Ah yeah again. Yeah.
Speaker 2 (34:38):
What do they say about leopard, you know, not being
able to change their spots? Okay, and quite frankly, you
just give it time.
Speaker 3 (34:45):
The others just.
Speaker 2 (34:46):
Haven't been caught yet. And you know, it's funny, but
not really. If you actually think about it, it makes sense.
The two big to fail firms, the big firms out there,
actually have the worst numbers of them all.
Speaker 3 (35:03):
Think about this.
Speaker 2 (35:04):
More than fifteen percent of their advisors have serious violations.
They don't tell you about that in their commercials, do
they no? Think about the fifteen percent of the advisors
at the too big to fail the Bank of America,
MARRIW Lynches, the Wells, Fargos, the Goldman Sachs, the Morgan Stanley's,
(35:28):
the JP Morgan's out there, fifteen percent have severe violations.
And you know what they found out too. They found
out that these financial marauders, they often locate them in
the areas where they have the easiest marks, the easiest targets.
(35:50):
They put them in areas where they have large populations
of retirees. I kid you not, sorry again. I I
started looking at other studies. This thing caught my interest,
and then there was another one here, the Market for
Financial Advice and Audit study. This came from the NBER
(36:10):
National Bureau of Economic Research, Now this looked into the
conflicts of interest that are okay, we call toys out
all the time, that are ever evident with countless brokers
and advisors all around the country.
Speaker 3 (36:24):
Now, their study.
Speaker 2 (36:25):
Basically shows how firms manipulate their clients into purchasing certain
products that are more beneficial to the broker or the
advisor than the client the firm. They found that the
advisors reinforce biases that are in their interests. These advisers
(36:47):
encourage faulty returns chasing behavior rather than proper asset allocation
and diversification, which we talk about here time and time again.
Speaker 3 (36:59):
I know we're boring.
Speaker 2 (37:01):
We're boring here at Markowski and oh no, go no,
not that, not that proper asset allocation of diversification.
Speaker 3 (37:08):
I don't want that. I want to chase outsized returns.
Speaker 2 (37:12):
At fex fan Sure, sure, but again what did I
say earlier? Get rich quick connartists the world's second oldest profession.
It works, greed and fear set the trap. They actually
(37:32):
conducted an experiment involving that they sent make believe investors
into They did this in Boston and to two one
hundred and eighty four offices advisor offices in the Boston area. Now,
when these make believe possible clients came into the office,
they actually brought with them account statements that showed great returns,
(37:56):
well performing, diversified, low cost poor fololios. Only two point
four percent of the advisors agreed with the existing portfolio.
Eighty five percent told them that they had to make
all sorts of changes. The advisors were eight times more
(38:16):
supportive if to make believe clients had a return return
chasing strategy that generated much larger commissions. Give many times
I tell people, no, we're not going to do that,
because it's wrong.
Speaker 3 (38:33):
You cannot let risk lead to ruin. Give many times
I tell people, well, you know, I gotta I gotta
catch up. I don't have enough money. I'm gonna have
to see higher returns. And I say, no, this.
Speaker 2 (38:43):
Is what you're gonna this is what we do, this
is how you're gonna build.
Speaker 3 (38:46):
Well, you're gonna have to save more. But who do
you want as an advisor?
Speaker 2 (38:53):
Someone that's gonna lie to you to make you feel
better for that point in time, or somebody's gonna actually
get the bloody job done. Wow, it was fun today.
An old school today, a lot of ripoffs and scams,
all sorts of great stuff.
Speaker 3 (39:08):
God bless everybody. We'll see you next week.
Speaker 2 (39:10):
Watchdog on Wall street dot com Watchdog on wallstreet dot com.
Speaker 1 (39:17):
Chris Borkowski is the watchdog on Wall Street
Well knowe altered investment banker, consumer advocate, analyst, trainer. Chris
Markowski is the watchdog on the Wall Street. Do you
want to answer exposing the lines and myths that the
big brokerage firms, the mainstream press, and the government are
pushing to keep Americans away from financial freedom. You can't
(00:29):
handle the true proof bringing America the truth about what
really happens in the financial world.
Speaker 2 (00:35):
Ladies and gentlemen. We're not here to indulge in fantasy,
but in political and economic reality.
Speaker 1 (00:40):
This is the watchdog Wall Streets.
Speaker 3 (00:45):
All right, Welcome back, everybody. All right, I wrote this down.
Speaker 1 (00:51):
I have.
Speaker 2 (00:51):
One of the things that I do a poor job
of when it comes to this program is uh, I
promise I'm going to get this something later on the program,
and again I get scatter brained. I get off the
beaten track. Then when I do that, and rightfully so,
people email me is, well, you.
Speaker 3 (01:10):
Were saying you were gonna talk about this and you
never got to it.
Speaker 2 (01:12):
And then I'm gonna answer a lot of emails. So
I again, I wrote this down earlier on the program.
I said I was going to talk a little bit
about the tie ins and what we learned about why
the mainstream media, why the mainstream media does not cover
Wall Street fraud and scams. They completely ignore it. And
(01:37):
again I remember, I remember when the you know, dot
com collapse, the blow up, the financial crisis, and guys
that put themselves out there is like populist hosts, guys
like Bill O'Reilly wouldn't touch it, wouldn't touch going after
(01:58):
Wall Street and there involvement in all of these ripoffs
and scams. You want to know why, well, go to
commercial break. Who is running advertisements for a period of time.
Speaker 3 (02:14):
Period of time is not as many anymore, There really isn't.
Speaker 2 (02:18):
And again I think one of the reasons is maybe
a little bit more on sports. Just the way that
people consume media. It's it's much different, but they still pay.
You know, you're seeing the advertisements. You see it in
their digital you'll see it online. You might see if
you know, go and you watch, you want to watch
(02:39):
a news story, you might see a clip from one
of the big firms there.
Speaker 3 (02:43):
They're still paying. But what are they paying for?
Speaker 2 (02:49):
You know, back back you know two thousand and four,
two thousand and five, there was a mind numbing excess
of brokerage commercials on TV.
Speaker 3 (02:59):
And again, I mean they made me sick to my stomach.
But at the time it was interesting.
Speaker 2 (03:05):
I took a look and I saw that the advertising
the firm spent was up almost thirty percent year over
year twenty four.
Speaker 3 (03:12):
To twenty five.
Speaker 2 (03:14):
And again, you take a look at the numbers today.
Even though they're not getting that much traction. You know,
people are not watching must see TV, not as much
television out there, they're still buying. They're still buying these ads.
And what was interesting about these ads and still to
this day.
Speaker 3 (03:32):
There's no call to action, there's no call to action.
Speaker 2 (03:38):
It's it's some you know, commercial trying to you know,
jerk at your you know, your emotions or whatever it
may be. But anyway, anyway, I remember at the time,
at the time it was an advertisement by Morgan Stanley.
Was they called their ad campaign the at your Side campaign,
(03:59):
and this campaign Morgan Stanley, you know, trying to rope
in customers by getting them to believe that a super
friendly Morgan family financial advisor is actually a trusted member
of the family. The wedding reception commercial has to be
one of the greatest puke inducers ever. Yeah again, they
(04:20):
had a guy there that would basically give it a
speech at.
Speaker 3 (04:24):
This guy's daughter's wedding. Oh well, you know, how about
how about some food? How about some comments from their dad?
And he was kind of this weird guy.
Speaker 2 (04:31):
And it was like the guy his dad came over
and gave him this weird look even in the commercial.
Speaker 3 (04:35):
I don't know, I found the whole thing weird.
Speaker 2 (04:38):
Okay, it will be nice to see a little bit
more time, I said, more honesty in their advertising. You know,
father explaining to her daughter that her wedding will be
held down at the ihop because he lost a small
fortune on Morgan Stanley's hot stock tips. Or better yet,
how about a man remodeling his home by wallpapering his
(04:59):
bathroom with worth of stock certificates courtesy if he is broker.
Speaker 3 (05:03):
How about all that garbage at Wall Street was shoving
down your throat during COVID. Oh yeah, these are disruptor companies. Yeah, disruptor.
You're gonna get into ease or spacks or other garbage.
All right again, how about this one?
Speaker 2 (05:18):
How about an advertisement with a very impressive looking stock
analyst telling his salesforce and his firms investors how wonderful
and terrific. The prospects for x y Z Corporation. Cut
to happy hour at the local watering hole. Later in
the day, the same analysts, having drinks starts boasting to
his buddies about what a dog x y Z is.
Speaker 3 (05:39):
But who cares the banking fees paid for my ferrari?
Speaker 2 (05:45):
Anyway, Why why did did you think that these Do
you think that these firms generate Do you think that
they generate business from these commercials? Now, Morgan stand is
a white shoe firm, Goldman Sacks white shoe firm.
Speaker 3 (06:06):
You you have to have.
Speaker 2 (06:07):
A significant amount of money to even walk in the
door at any of those places. Do you think that
those people are looking at a commercial saying, Yeah, I'm
gonna go to Morgan Stanley, I'm gonna go to Uh,
I'm gonna go to Goldman Sachs.
Speaker 3 (06:25):
No way, no, how that gonna happen.
Speaker 2 (06:31):
The reason, okay, we discovered this, the reason why they
spend all of this money on advertising is guess what,
to buy them?
Speaker 3 (06:41):
Good press? To buy them good press.
Speaker 2 (06:45):
So I got a hold of one of Morgan Stanley's
advertising contracts and it said this, and I quote in
the event, and the event that objectional editorial coverage is planned,
Morgan'sley's ad agency must be notified as a last minute
change maybe necessary.
Speaker 3 (07:05):
If an issue arises after hours or a call cannot.
Speaker 2 (07:08):
Be made, immediately cancel all Morgan Stanley ads for a
minimum of forty eight hours.
Speaker 3 (07:15):
Yeah right again.
Speaker 2 (07:18):
I go back to that great television shows mad Men,
and one of the guys from the added executive boasting
that he could tell the New York Times to print
mind comf on the front pages and they would do it.
Speaker 3 (07:32):
He spends so much money in advertising in the New
York Times.
Speaker 2 (07:36):
They're buying great editorial coverage and they still do.
Speaker 3 (07:46):
That's why.
Speaker 2 (07:48):
That's why these stories don't get covered. You know how
many times I've been asked about that over the years.
People will listen to this program, or I'll get an
email basically question me, that's not real. That could be real.
If that was real, it would be on the news.
Naive How naive people can be.
Speaker 3 (08:13):
And it's it is what it is people.
Speaker 2 (08:16):
I mean again, I do the best I can I
do anyway, Ah, you know what I talk a little bit,
You know, why not? We're talking about the big firms, right,
now and I don't care because I got this as well.
You're like, I can't believe, can't believe these big firms
haven't sued, you haven't gone after you off all the
stuff you say about them. I say, you know, I'm
(08:37):
an equal opportunity basher, I go after everybody. I'm just
you know, I don't lie. What are they gonna go
after me for? Did I say something that's not accurate?
Have I said something ever on this program that hasn't
been true?
Speaker 3 (08:49):
What are they to do?
Speaker 2 (08:52):
So?
Speaker 1 (08:52):
For? What?
Speaker 3 (08:53):
Being honest? I get a kick out of the ridiculous
mission statements from these various different big firms. It is
big ones also.
Speaker 2 (09:09):
Edward Jones of the World and these other ones as well,
JP Morgan Chase. Our integrity and reputation depend on our
ability to do the right thing, even when it's not
the easy thing, and there's Goldman Sachs, No financial incentive
or opportunity, regardless of the bottom line, justifies a departure
from our values. Right or the talent and passion of
(09:33):
our people are critical to our success. Together, we share
a common set of values rooted in integrity and excellence.
As Morgan Stanley and then there's merilyns. The interests of
our clients must come first. They actually say these things,
they actually put them in their mission statements. But again,
(09:55):
you could say whatever you want. Last time I checked action.
Speaker 3 (10:02):
Actions. How you what you do, okay is what matters.
You just say whatever you want.
Speaker 2 (10:10):
You can have your ad agency, you can have your
PR people. You could have put out whatever BS mission
statement they want. But you, guys, you don't operate this way.
And you know you don't operate this way. You know this,
this this part of the problem.
Speaker 3 (10:26):
Again.
Speaker 2 (10:26):
I talked about talked about Glass Stegel, right, and they
repealed Glass Steagel and what it did in nineteen.
Speaker 3 (10:35):
Forty seven, It's true.
Speaker 2 (10:36):
Nineteen forty seven, the US government sued wait for it,
the top seventeen investment banks seventeen for violating anti trust laws,
basically collusion. The Justice Department, in their suit alleged that
the investment firms had created and integrated overall conspiracy and
(10:58):
combination beginning in nineteen fifteen and in continuous operation thereafter,
by which they developed a system to eliminate competition and
monopolize the cream of the business of investment banking.
Speaker 3 (11:13):
Now get your arms around this seventeen seventeen. Okay, what
do we have today? Do we even have a handful? Anyway?
Speaker 2 (11:28):
The US argued at the time, at the top Wall
Street investment banks, including Morgan Stanley, who was the lead defendant,
and Goldman Sachs, had basically crafted a type of cartel
which was able to set prices charged for their services
such as securities, underwriting, mergers acquisitions. The firms colluded to
(11:50):
essentially box out any other smaller banks. It was discovered
that the big investment firms would strategically place their partners
on the client's board of directors. Again, nothing's changed. This
happened all the time during the nineteen nineties.
Speaker 3 (12:07):
We covered it.
Speaker 2 (12:09):
By doing this, it placed their firms in a variable,
very favorable position to win and basically to win, and
not actually know where the business was coming from and
how to go about winning it.
Speaker 3 (12:19):
They knew everything. Now, think about that.
Speaker 2 (12:23):
I could only wish there were seventeen investment banks competing
against one another today. There was, There was quite a
few more back in the nineteen but there wasn't even seventeen.
Speaker 3 (12:34):
Then.
Speaker 2 (12:37):
All we have is too big to fail. All we
have is too big to fail. When banks are too bad.
And again this I'm going to go to Barack Obamas.
This was telling Barack Obama's Attorney general, remember Eric Holder.
Eric Holder was being it was actually during a Senate
(12:58):
hearing and two thousand thirteen, and he said, when banks
are considered too big to fail, it's difficult to prosecute them.
Speaker 3 (13:08):
If we do bring a criminal charge.
Speaker 2 (13:09):
It will have to be it will have a negative
impact on the national economy. Again, what does that lead
us to what we've been talking about for years and
years and years the watchdog on Wall Street, access of evil,
big business politicians and the media working hand in hand.
If all of these big banking institutions are too big
(13:32):
to fail, what does that mean they can do whatever
they want. They can do whatever they want.
Speaker 3 (13:43):
I just thought about this. There was again because I
got a kick out of Greek mythology.
Speaker 2 (13:47):
There's a I forgot the name of the show quite frank,
It was okay, but I like Jeff Goldblum as well.
Speaker 3 (13:52):
Basically is the show about the Greek gods.
Speaker 2 (13:57):
Being around kind of today and you know, well not today,
but it was kind of like an alternative universe where people,
you know, still worship them and they were just awful.
Speaker 3 (14:07):
You think of with the Greek gods, I mean just
they were just there.
Speaker 2 (14:09):
They were not they were not nice at all. That's
basically what we have right now, you know. But they
were Greek gods, they were omnipotent. They could do whatever
they want. That's what these big banks are. Again, what
are you gonna do to them?
Speaker 3 (14:25):
You're gonna do them.
Speaker 2 (14:26):
Oh and we got caught. Okay, well we'll pay a fine.
We'll pay a fine, and we go back to doing
what we were doing before.
Speaker 3 (14:34):
See.
Speaker 2 (14:35):
You know, there was the president, well the former president
the Federal Reserve Bank of Dallas, Richard Fisher. He pointed
out another example the problem with too big to fail,
something that we've pointed out as well.
Speaker 3 (14:47):
It's not fair. There's an when you're too big to fail.
Speaker 2 (14:51):
That means what that means you have access to capital
at a price that nobody else can get. Why because
you can't fail, there's no risk, he said, The megabanks
can raise capital more cheaply than smaller banks. Studies, including
those published by the IMF, estimate this advantage to be
(15:11):
as much as one hundred basis points. That's huge, quite frankly,
and let's be honest, what happened, What happened to all
of the small banks?
Speaker 3 (15:24):
What happened to most of the community banks out there?
Where did they go?
Speaker 2 (15:29):
They couldn't compete, They couldn't compete, so they sold out
to the bigger banks and they are no longer.
Speaker 3 (15:38):
Again. Is this capitalist? No, it's not.
Speaker 1 (15:43):
It's not.
Speaker 2 (15:44):
When when the government gets this this far in with
an industry, when it gets this far, it's it's basically
socialists to some degree, quite frankly, is exactly what it is.
Speaker 3 (15:59):
It's basically a socialist empire. Gotta take a break.
Speaker 2 (16:04):
Watchdog on Wallstreet dot com, Watchdog on Wallstreet dot com again.
Become a part of the Watchdog on Wall Street family,
our our personal CFO program, work with the Markowski family,
our podcast, all sorts of great stuff. Watchdog on Wall
Street dot com or give us a call eight hundred
four seven.
Speaker 1 (16:26):
Stead This is the Watchdog on Wall Street.
Speaker 3 (16:52):
Welcome back, Welcome back anyway. People. It's a it's anfortunate but.
Speaker 2 (17:01):
You know, many people say, I can't I can't work
with Goldman Sachs, I can't work with Morgan's. These are
you know, for big you know investors out there and
they've got the smaller ones out there, the Edward Joneses
of the world.
Speaker 3 (17:13):
The America Prize is out there, all right.
Speaker 2 (17:19):
We've been trying very very hard, very hard because again,
I have a lot of a lot of listeners, a
lot of advisors listen to this program that work.
Speaker 3 (17:29):
For those firms. It's like the Hotel California.
Speaker 2 (17:36):
They they can't they can't get out the type of
contracts that they put them in. They're not happy, they're
they're not happy in the slightest about what they have
to do about the business, who they're working for, how
things are done. But it making it very very difficult
for them to leave. And again, these firms come after
(17:57):
I know it's there were Jones folks, and they're commercials
and all that stuff. Oh yeah, everybody knows your name.
Speaker 3 (18:06):
Yeah.
Speaker 2 (18:07):
Well again, we've covered this here on the program. It
was just a couple of years ago where we found
out that they were starting to do the culling of
the clients.
Speaker 3 (18:19):
Oh yeah, yeah, firms do this.
Speaker 2 (18:21):
They again, they take a look at these smaller, less
worthy clients and then they send them off to some
sort of bloody call center.
Speaker 3 (18:32):
Hell yeah, you don't have.
Speaker 2 (18:36):
Enough money with us, You're not worth, not worth our
time and trouble. And again, for many of these advisors,
they don't want to do this to their clients.
Speaker 3 (18:45):
They don't have a choice. They don't have a choice. Again,
I guess over.
Speaker 2 (18:53):
At Edward Jones when I was covering this couple of
years ago, anybody who had less than fifty thousand dollars
to be shipped off to a call center so their
account could be handled by some sort of incompetent boob. Okay,
how do I know that they're incompetent, Well, if they
had the slightest bit of acumen, I'm sure Edward Jones
(19:15):
wouldn't have them handling accounts that they really didn't want.
Speaker 3 (19:19):
And the other thing is, people, I've been around the
block about a.
Speaker 2 (19:23):
Thousand times, and I've seen this movie before, and what
happens on every occasion is the incompetent call center advisor
puts the expendable client into a high commission, low performing
product until they decide to transfer out, Shurn them and
burn them until they leave, bang them out for the
most you can, and then.
Speaker 3 (19:43):
They will go problem solved, Problem solved.
Speaker 2 (19:50):
There's a disgusting industry practice that quite frankly is encouraged.
It's actually encouraged handle discussions. At every industry conference that
I have ever attended, I don't go to anymore, they
have a breakout session on practice management where advisors are
(20:11):
told fire all of your smaller clients so you can
focus all your attention kissing the buttocks of the ten million.
Speaker 3 (20:18):
Dollar plus crowd. We don't operate in that way. It's wrong. Okay,
it's not even that's not personal strictly business. No, it's not.
Speaker 2 (20:32):
Okay, it's personal, and it's wrong. Watchdog on Wallstreet dot Com.
Watchdog on Wallstreet dot Com will be back.
Speaker 1 (20:41):
Chris Markowski is the watchdog of all storms, the only
man who is taking on the Walls Street establishments. You're
(21:03):
listening to the Watchdog and Wall Street with Chris Markowski.
Speaker 2 (21:15):
Since the beginning of this show, I have I've got
three three emails, I do not three emails from various
different private equity companies asking to bias. Here's the latest one, Chris,
are you free for a few minutes to connect and
discuss the acquisition options for your ri I A. I'm
(21:38):
working with a solid group that's paying top revenue and
ebidah multiples depending on the type and skill of the firm.
Noose strings attached. Just to call to get familiar with
your business and requirements in detail.
Speaker 3 (21:49):
I can tell you if we can get your number
or not.
Speaker 2 (21:55):
Yeah, yeah, go take a long walk off the short pier. Sorry,
you're not going to churn and burn my clients anyway. Anyway,
back to back to the smaller firms, and again this
is most certainly a problem with the industry.
Speaker 3 (22:12):
That I saw this happening a mile away. I saw
it again.
Speaker 2 (22:18):
I saw it when I first started working in the business,
you know, way way, you know, thirty plus years ago.
You know, I saw what was going on at Merrilynch
and these other firms saying, hey, listen, you know, unless
you have X amount of dollars, we're not going to
do business with you. And I think again, I, you know,
(22:38):
ask questions. When I was a kid, I came from
you know, monest means, you know, middle class family upstate
New York. And for the life of me, I was like, why,
why wouldn't you want to help people if they need help?
Wh wouldn't you want to try to help people build
wealth and.
Speaker 3 (22:53):
Then a good thing. Now they want to be bothered.
What about it?
Speaker 2 (22:58):
We only deal with people that are already have money. Listen, Okay,
you know we do too. Okay, we do too. We
accounts that come into Markowski Investments, you know, tens of
million dollars.
Speaker 3 (23:12):
Yeah.
Speaker 2 (23:14):
Yeah, Again, they're a different scenario than people that were
trying to build wealth for obviously a little bit different.
But why would I not help somebody out? Why would
I not try to build somebody wealth over time? I said,
those are stories that are in my book work, time
(23:34):
and effort. These are people that I've known for decades
and watch them build their businesses up, build their wealth
over time.
Speaker 3 (23:41):
You know how satisfying that is.
Speaker 2 (23:46):
And again it want no part of that, because again
you Wall streeted it changed. It changed into a basic
selling machine, selling machine of you know, certain types of
financial products can't be bothered with trying to help people
build wealth. And that's when you started getting some of
these other smaller firms out there that started marketing. They
(24:09):
want to call it that you want the mass affluent crowd.
I don't know what the exact terminology they're using nowadays.
The Americ Prizes, the Edward Jones, But again, they can't
help themselves. They can't help themselves. You know this program
I highlighted a couple of years ago at Edward Jones.
Speaker 3 (24:31):
It was called Edward Jones Connection.
Speaker 2 (24:34):
It was being sold to advisors as a time saver,
time saver for prospecting and servicing larger clients. Again, we
found out that they received eighty two million dollars in
payments from several different mutual fund companies. And again the
(24:54):
fee structure gave their advisors greater compensation for hawking poorly
performing funds over stellar performers.
Speaker 3 (25:05):
Okay, this practice is called it, and it's a screwed
up practice.
Speaker 2 (25:07):
Called revenue sharing, where fun companies would compensate broke wig
firms more in order to induce them to sell their products.
Hey again, I get it all the time. I get
it all the time. Oh well, I will give you
money for this marketing thing. You want to hold, this event,
you want to go on vacation, We got it, will
(25:28):
take care of you. So you had Edward Jones brokers
pushing these preferred funds over better performers. Some of the
most hideous performing fun families offered the most lucrative of incentives.
Speaker 3 (25:45):
Go figure.
Speaker 2 (25:47):
Here is an actual quote, Okay, this is from an
Edward Jones and he was doing an interview with Advisor
Hub and he said that the firm, and I kid
you not, was much like the Soviet and that they
are in the business of pushing products and policies that
benefit the general partners first. And I quote in reference
(26:10):
to Jones being like the USSR. There's nothing going on
at that firm that is in the best interest of
the client and the poor folks they hire with zero
financial experience lap up the kool aid without question because Jim,
Bob and Dwayne Jones make you feel so gosh darn good.
For example, their advisory solutions, their manage account program where
(26:33):
they are double dipping with their own funds. What Edward
Jones is doing and is allowed to do is criminal.
They are firing a lot of great advisors. Great advisors
are let go because they do the right thing by
discounting fees for clients, are selling a bond the correct way.
How about lavish five star trips that the firm sends
(26:56):
ninety percent of their advisors that are paid for by
the mutual fund companies who pay to be in the
Jones system.
Speaker 3 (27:05):
And again, core values look up core values, Edward Jones.
Speaker 2 (27:09):
Our clients' interests come first, really really, so sending your
your unworthy clients to call center hell and pushing crappy,
high commission financial products on your clients is in their
best interest?
Speaker 3 (27:22):
Really? Can people wake up? Know who you're doing business with?
Got to take a break. Watchdog on Wallstreet dot com.
Speaker 2 (27:32):
Watchdog on Wallstreet dot Com again our Personal c f
OH program. Become a part of our personal c f
O program. Sign up for our podcast All sorts of
great stuff there at our site, Watchdog on Wall Street
dot Com.
Speaker 3 (27:47):
We'll be back. Why crowd.
Speaker 1 (28:00):
Yeah, you should believe in math not magic. You're listening
to the Watchdog on Wall Street with Chris Markowski.
Speaker 3 (28:13):
Look about everybody, Welcome back.
Speaker 2 (28:15):
It is the Watchdog on Wall Street show, our Markowski
Investments personal CFO program. Yeah, I've oftentimes again we work
on the fundamentals all the time. Here on the program,
we go over our our process and how we build wealth.
And like I said earlier, there's no magic, there's no trick.
(28:36):
It's just eternal wisdom. Quite frankly, that's it.
Speaker 3 (28:41):
That's it.
Speaker 2 (28:42):
You know, the simple rules of the road that we
follow that work the personal CFO program. Again I I
thought about this, I came up with I had to
be like two thousand and four, two thousand and five,
I actually started writing a side little uh newsletter entitled
Personal CFO. What we offer to all of our clients
(29:07):
is the same type of services.
Speaker 3 (29:10):
Not it's not totally true.
Speaker 2 (29:12):
Not the same type of services, but the same important
services in the sense that if you need legal we
can help you with that. You need accounting, we have
the best in the business, and of course our money
management services.
Speaker 3 (29:26):
Now again it's what a family office would offer. Okay.
Speaker 2 (29:30):
What we don't offer as far as a family office
is concerned is no, no, no, I'm not you know,
I'm not making hotel reservations for you. You know, if
you've got some brady kid, I'm not bailing them out
of jail. I'm not gassing your boat up over the
course that we.
Speaker 3 (29:45):
Can actually we we actually get that.
Speaker 2 (29:48):
You know sometimes that people you know, well guys serious money.
Speaker 3 (29:53):
Well, well can you guys do some of this stuff? No, no,
that that's that's not what we do.
Speaker 2 (29:59):
Okay, We're not in the butt kissing business at Markowski Investments.
Speaker 3 (30:04):
But again, you gonna become part of our personal CFO program.
Speaker 2 (30:06):
You're gonna learn how to navigate financial storms, corrections, volatility,
learn how to avoid serious risk, including stuff the old
black swans and things that come out of nowhere.
Speaker 3 (30:19):
How you handle that.
Speaker 2 (30:22):
Thing. We often talk about here on the program, again
and again and again.
Speaker 3 (30:26):
Conventional wisdom. Conventional wisdom.
Speaker 2 (30:29):
Oh, it's gotta be right, because everybody's thinking it's this way.
Speaker 3 (30:33):
It has to be this way.
Speaker 2 (30:35):
Discerning the difference between the conventional wisdom of the day
and the reality of the terrain. Where to find, where
to find those great safe yields that you can have,
letting compounding work its magic, how to apply them, and
how our our clients have positioned themselves for success through again,
(31:00):
some of the markets histories, most turbulent markets, going back
over three decades. How do we do it? How don't
we put I get her all the time? Okay, And
it's simple. I'll show you our process. I'll show you
our process. And again it's the same for everybody. Everybody's
portfolio is different because everyone's unique and different, but the process.
Speaker 3 (31:22):
Nonetheless is still the same. I have to take a break.
Speaker 2 (31:26):
Watch Dog on Wall Street dot Com, Watchdog on Wall
Street dot com again. Sign up for a personal CFO program, podcast, newsletter,
all sorts of great stuff.
Speaker 3 (31:34):
Watchdog on Wallstreet dot com. We'll be back.
Speaker 1 (31:40):
You're listening to the Watchdog on Wall Street bringing America
(32:00):
financial freedom, one listener at a time. You're listening to
the Watchdog on Wall Street with Chris Markowski.
Speaker 3 (32:10):
Got sad too.
Speaker 2 (32:11):
You know, I feel horrible and I just got a
lot of these these advisors they want out, they don't
want to work at these firms anymore. And again, they
sign their name, they sign their name on these contracts,
and you know, they get laid off, they can't get
back into the business or a certain period of time.
And if they do, they're not allowed to contact any
(32:33):
of their old clients. If they do, the firm is
going to come after them. And again, the firm's got
a lot more money. The firm's got a lot more money.
They got much bigger lawyers, and they go after you.
Make your life absolutely miserable. And again, yeah, did anybody
ever yody open up an account at Edward Jones or
Amraprize based u pecan the fact that they're Edward Jones
(32:55):
and Amraprize seriously ridiculous quite but anyway, anyway, let's share
with you this too. I do a lot of obscure
reading on studies and whatnot. This came from a study
it was called the Market for Financial Advisor Misconduct and
stuff that I read.
Speaker 3 (33:17):
In the Journal of Political Economy. I'm a dork anyway.
Speaker 2 (33:21):
The average, the average brokerage firm, at least eight eight
percent of the brokers that they have have a record
of severe wrongdoing. Now again, I want you to think
about that for a second. If you went to a
hospital and you found out that eight percent of the
(33:44):
doctors that work with that hospital have a done severe wrongdoing,
I think you probably look to go somewhere.
Speaker 3 (33:51):
Anyway. Of that group of brokers or advisors.
Speaker 2 (33:57):
Fifty actually maintained their job after being caught. Now, the
ones that were terminated were hired, you know, the half
were hired at another firm. So seventy five percent of
brokers that were caught severe misconduct ripping off clients are
(34:23):
still managing money. Of that group, thirty eight percent we're
caught screwing investors over again.
Speaker 3 (34:36):
Ah yeah again. Yeah.
Speaker 2 (34:38):
What do they say about leopard, you know, not being
able to change their spots? Okay, and quite frankly, you
just give it time.
Speaker 3 (34:45):
The others just.
Speaker 2 (34:46):
Haven't been caught yet. And you know, it's funny, but
not really. If you actually think about it, it makes sense.
The two big to fail firms, the big firms out there,
actually have the worst numbers of them all.
Speaker 3 (35:03):
Think about this.
Speaker 2 (35:04):
More than fifteen percent of their advisors have serious violations.
They don't tell you about that in their commercials, do
they no? Think about the fifteen percent of the advisors
at the too big to fail the Bank of America,
MARRIW Lynches, the Wells, Fargos, the Goldman Sachs, the Morgan Stanley's,
(35:28):
the JP Morgan's out there, fifteen percent have severe violations.
And you know what they found out too. They found
out that these financial marauders, they often locate them in
the areas where they have the easiest marks, the easiest targets.
(35:50):
They put them in areas where they have large populations
of retirees. I kid you not, sorry again. I I
started looking at other studies. This thing caught my interest,
and then there was another one here, the Market for
Financial Advice and Audit study. This came from the NBER
(36:10):
National Bureau of Economic Research, Now this looked into the
conflicts of interest that are okay, we call toys out
all the time, that are ever evident with countless brokers
and advisors all around the country.
Speaker 3 (36:24):
Now, their study.
Speaker 2 (36:25):
Basically shows how firms manipulate their clients into purchasing certain
products that are more beneficial to the broker or the
advisor than the client the firm. They found that the
advisors reinforce biases that are in their interests. These advisers
(36:47):
encourage faulty returns chasing behavior rather than proper asset allocation
and diversification, which we talk about here time and time again.
Speaker 3 (36:59):
I know we're boring.
Speaker 2 (37:01):
We're boring here at Markowski and oh no, go no,
not that, not that proper asset allocation of diversification.
Speaker 3 (37:08):
I don't want that. I want to chase outsized returns.
Speaker 2 (37:12):
At fex fan Sure, sure, but again what did I
say earlier? Get rich quick connartists the world's second oldest profession.
It works, greed and fear set the trap. They actually
(37:32):
conducted an experiment involving that they sent make believe investors
into They did this in Boston and to two one
hundred and eighty four offices advisor offices in the Boston area. Now,
when these make believe possible clients came into the office,
they actually brought with them account statements that showed great returns,
(37:56):
well performing, diversified, low cost poor fololios. Only two point
four percent of the advisors agreed with the existing portfolio.
Eighty five percent told them that they had to make
all sorts of changes. The advisors were eight times more
(38:16):
supportive if to make believe clients had a return return
chasing strategy that generated much larger commissions. Give many times
I tell people, no, we're not going to do that,
because it's wrong.
Speaker 3 (38:33):
You cannot let risk lead to ruin. Give many times
I tell people, well, you know, I gotta I gotta
catch up. I don't have enough money. I'm gonna have
to see higher returns. And I say, no, this.
Speaker 2 (38:43):
Is what you're gonna this is what we do, this
is how you're gonna build.
Speaker 3 (38:46):
Well, you're gonna have to save more. But who do
you want as an advisor?
Speaker 2 (38:53):
Someone that's gonna lie to you to make you feel
better for that point in time, or somebody's gonna actually
get the bloody job done. Wow, it was fun today.
An old school today, a lot of ripoffs and scams,
all sorts of great stuff.
Speaker 3 (39:08):
God bless everybody. We'll see you next week.
Speaker 2 (39:10):
Watchdog on Wall street dot com Watchdog on wallstreet dot com.
Speaker 1 (39:17):
Chris Borkowski is the watchdog on Wall Street
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