WHY I WROTE THIS BOOK
I am not a teacher but an awakener.
This book is designed in part to help investors protect themselves from Wall Street practices that I saw firsthand many years ago. Fresh out of college in the 1960s, I became a broker for a large Wall Street firm. Training classes in New York quickly taught me the priorities that should dominate my working day.
I guess I was naive and too idealistic for Wall Street. I had looked forward to helping people with their money. It didn't take long to learn that Wall Street had only one high-priority objective: sell.
Sales, of course, required trading activity. Gradually, I realized Wall Street was infected with an attitude that didn't seem right to me: If the clients were content, they weren't doing the firm any good. No matter what the clients had done, it was the broker's job to persuade them to do something else.
Ideally, that "something else" involved buying proprietary products on which the big brokerage houses earned unusually high commissions. Sometimes brokers were offered incentives such as free trips. In most cases, the commissions and the cost of the trips were built into the price of the products. This allowed brokers to tell clients they could buy these products without paying any commission. The clients thought they were getting a special deal. We knew otherwise: They were being exploited.
I'll admit the sophisticated world of New York City held quite an allure to a young man from Wenatchee, Washington. ...