Friday, March 2, 2012

Ex-Wall Street broker: 'It starts with a lie'

Here's what ex-broker and author Joshua Brown said about what's wrong with his business:

"The basic premise of a broker pitching a client is 'I'm going to be
 able to consistently generate 20 percent returns a year or I'm going to consistently beat the market.' They have no way to show any track record. They are managing hundreds of different accounts, each one is different. So I think it starts with a lie."

And on why he became a reformed broker:

"In 2008, everything really crystallized for me. The market was melting down. But at the retail brokerages, there were analysts still picking stocks. Nobody said, 'Go to cash.' That's when you realize: This has nothing to do with taking care of clients and everything to do with generating gross commissions."

By Devin Leonard
February 28, 2012 | Bloomberg Businessweek

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