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This was a good book, I truly enjoyed reading it. The primary reason that I enjoyed it so much is because it’s the book I have been hoping to find from someone like author Joshua Brown: a book that tells the truth about what’s really going on on the seamy side of Wall Street (which is the only side, to be truthful).
Joshua Brown (TheReformedBroker.com) provides a unique perspective – that of someone who has been involved in the “inside” of wirehouse broker-dealers, but who has since seen the light and moved on to a career in independent investment advice. As such, Mr. Brown has seen the worst of the worst, in terms of how these institutions treat the investing public. Once he became aware of how it all worked, through a great degree of soul-searching (and a whole lot of gumption), stepped away from it all and has never looked back.
In Backstage Wall Street, Brown lifts the veil of secrecy around how the process works, explaining how the back-room dialers constantly call folks and work through a script to get the recipients of the call to agree to fork over money. It’s understood that if the person picks up the phone, the longer the broker can keep the person on the phone the better the chance of selling something – no matter how bad it is. This business is similar to the three-card-monte guy on the street, but worse: by working under the seemingly staid letterheads of large corporations, there is the impression that the callers are giving advice. In the end, all they are doing is pushing a sale, and the guy calling you doesn’t care if it’s a good thing he’s selling you or not – only that he’s making a sale.
I found the book to be informative mostly in that it is confirmation of what I’ve learned through the years and believed to be true about these outfits. Joshua Brown has done a great job in exposing the underbelly of the financial industry, and I believe he truly enjoys the position this has put him in. As noted, he has been referred to as the “merchant of snark” by the New York Times for his expose’, and this snarkiness comes through in his book, making it a fun read in addition to an informative book.
If you have any involvement in the financial services industry as a profession, you probably know (or have an inkling about) many of these things already. Brown’s insights and presentation make the book worth the read nonetheless (and you’ll probably learn a thing or two along the line).
If you use a broker to “help” with your investments, you owe it to yourself to read this book – asap. If you have ever found yourself wondering just why it is that your “investment guy” makes one recommendation over another – you need to read this book. If you have money invested anywhere at all other than bank CD’s, you need to read this book. I am certain that your eyes will be opened, and you’ll be a better consumer as a result of it.