Wise as a Serpent: Comments from a Dove
This article appeared originally in the December 2007 Levitt Letter.
Dear Mark,
Your information on stockbrokers is
way off base—and promoting one
investment company like Vanguard
is dangerous. You should contact
organizations like Kingdom Advisors
www.kingdomadvisors.org to get a
better understanding instead of issuing
a blanket bashing of stockbrokers.
M.F.
Dear M.F. —
My information about stock brokerage
firms stems from personal experience
and years of reading and studying
acclaimed financial experts like Christian
financial counselor Larry Burkett
(1939–2003), Scott Burns (www.dallasnews.com/business/scottburns),
and
Daniel Solin, author of The Smartest
Investment Book You’ll Ever Read: The
Simple, Stress-Free Way to Reach Your
Investment Goals.
Timothy Harper’s book License to Steal: The Secret World of Wall Street and the Systematic Plundering of the American Investor reveals that most brokerage firms are all about making money for themselves, not giving a lick about clients. An elite stockbroker revealed that he viewed his investors’ nest eggs as nothing more than vehicles for making all the loot he could for himself. (A shark does not hate the fish he eats anymore than you hate a hamburger that you devour for lunch. Nor does he care how the fish comes out of the transaction.) Big business is under the gun to maximize profits, and top executives collect major bonuses on net earnings in the shortrun. Human nature and societal pressures dictate that it pays to exploit investors.
Burns and Solin claim that even dovish
brokers (from Kingdom Advisors or
wherever) cannot outperform the
broadly diversified, low-expense propositions
at Vanguard. Dear Reader: for
helpful specifics, please refer to my
previous Levitt Letter articles in June
(page 13) and August (page 5). Both are
archived at www.levitt.com.)
—Mark
Dear Mark,
In the 1990s, our family had three brokerage
accounts worth a total $14,000,000.
Our financial advisor told us we were
fine for the rest of our lives. In 2001, he
confessed to defrauding us and 60 other
investors. He went to jail for seven years.
Our accounts were worth only $4,000.
We were forced into arbitration, but got
no money back. The lawyers involved
in this process were nothing short of
vipers. Our home is now for sale, and
we receive only $1,000 per month from
Social Security. I would like to write a
book about all the deception and fraud.
C.L.
Dear C.L. —
Tobacco companies make an art form
of persuading children that inhaling
smoke will transform them into rugged
men and glamorous women. Greed
often drives human nature to treachery.
Therefore, it is perilous to assume that
most brokerage firms have any higher
regard for their clients’ portfolios than
Philip Morris has for your lungs.
—Mark