Long Term Greedy
Gordon Gekko, “Wall Street,” 1987
“The point is, ladies and gentleman, that greed -- for lack of a better word -- is good.
Greed is right.
Greed works.
Greed clarifies, cuts through, and captures the essence of the evolutionary spirit.
Greed, in all of its forms -- greed for life, for money, for love, knowledge -- has marked the upward surge of mankind.
And greed -- you mark my words -- will not only save Teldar Paper, but that other malfunctioning corporation called the USA.”
I was in business school in the mid 1990s. Amazingly, even for me, that was less than a decade after Gekko made his now famous, “greed is good,” speech in Oliver Stone’s, “Wall Street.” My entrepreneurship professor was very popular. His classes were always oversubscribed, but I was lucky to get a seat one semester. He was very successful & operated an in-demand consulting practice as well.
One of the things he told us, as budding entrepreneurs was to be long term greedy. This was not the greed of Gordon Gekko fame, but the type of, “greed,” that naturally resulted in you doing better if your clients did better. This is not to be confused with the old financial advisor sales pitch, “I do better if you do better.” This concept of greed might be better described by a very different word, generosity.
The other way he explained his greed was to say that he wanted to have his hand, “as deep in my clients’ pockets as possible.” Again, we can sense the 80’s hangover here, but what he went on to say was that if he did his best job for his clients, gave of his time and expertise, so that they were more happy and successful than they’d ever been before, they would not want to remove his hand.
Let’s contrast that with good old Gordon Gekko.
Gordon was fast, or he wanted to be. He wanted to do a deal, get in & get out with as much profit as possible, as quickly as possible. As a result, he didn’t care what condition he left his clients, err, I mean, “targets,” in. For him, it was actually irrelevant whether they even survived.
My belief is that for people to get the most out of an advisory relationship, the relationship needs to be both deep & longstanding. I might be able to evaluate your investment portfolio quickly, but I can not know whether that portfolio makes sense for you without truly getting to know you and you family. That just takes time.
If I were to overcharge you, or to sell you something you didn’t really want or need, like an IUL or other cash value life insurance policy, that would greatly increase the likelihood of you ending our relationship, “early.” If I were to, “sell,” you investment products that were more in my firm’s best interest than yours, that might leave a bad taste in your mouth, or cause you to question my other advice. It could also lead to your terminating the relationship. I could make some money off of you, but that behavior isn’t long term greedy at all.
In fact, several of my clients left other advisors or big box Wall Street firms who were making good money off of them, simply because of the way those firms calculate fees, mainly because that’s how the industry works. The problem isn’t even so much the dollar amount paid, but the way it’s charged, which can leave a bad taste in people’s mouths, again leading to them ending relationships early.
If you’re looking to begin a relationship with a financial advisor, find one who operates in a manner that you’re happy with. Any level of discomfort at the start of the relationship will only grow, cause you to pull back, and not get as much out of it as you should.
You don’t want your advisor to be greedy, you want your advisor to be long term greedy.
Now, if memory serves, Teldar Paper didn’t do that well in the movie, though there have been people who’ve looked at what might have happened. My goal is for my clients to look back & think more about all the good things that happened over the course of time, not seeing our relationship as transactional at all.
