Tag Archives: Wall Street

Wall Street Ethics: The Vanguard Test

Last week, Susanne Craig and Jessica Silver-Greenberg of The New York Times wrote a smoking-gun story about the lack of ethics at JPMorgan Chase. “[As JPMorgan Chase] became one of the nation’s largest mutual fund managers, some current and former brokers say it emphasized its sales over clients’ needs,” wrote the duo. This is a surprise to people? For decades, the traditional investment business, aka “Wall Street,” has thrived on a hard-core sales culture, with a legal and ethical credo that amounts to buyer beware. Of course, it’s hard for buyers to beware in such a complicated business with so little transparency. Every few years, journalists and regulators rediscover the problem with Wall Street. In a follow up story to […]

Silicon Valley Pulls Top Grads From Wall Street

Tech Draws Graduates Away From Wall Street

For years, the Ivy League colleges have sent many of their best and brightest mathematical and scientific minds to Wall Street as financial engineers. One of the drivers, of course, is money. Wall Street has always topped the list of the highest-paid industries – even rising above generally good pay in the tech sector by a factor of two or three. Yet, there’s another, more subtle reason for the conduit between these Northeastern Ivies and Wall Street. It’s the same reason there’s a conduit between Stanford and technology companies. It’s simple really: Young people tend to follow their peers into careers where paths are already carved for them. If a dozen of your engineering-major friends end up at Deutsche Bank, […]

The ‘Toxic’ Culture At Goldman Sachs

Toxic Culture at Goldman Sachs

The very public resignation today by a Goldman Sachs executive makes it clear that Wall Street’s rotten culture extends even to the firm that has long been considered investment banks’ standard-bearer. Greg Smith resigned on the op-ed pages of The New York Times, in a letter that openly rips into Goldman Sachs, its culture and its top brass. He had been an executive director and head of the firm’s U.S. equity derivatives business in Europe, the Middle East and Africa. The reason for the blast? He says Goldman culture has degraded to the point that clients are seen as “muppets” and manipulated to produce as much revenue as possible for the firm. “I can honestly say that the environment now […]

Wall Street Invades Silicon Valley

How Wall Street Brokers See The Facebook IPO

Brokers around the country have woken up to the wealth being created by Silicon Valley IPOs and are busy plotting to get a share of it. One trade publication for brokers and financial advisors published a kind of “cheat sheet” on big Valley companies, which ends with the suggestion that brokers should become less like the Flintstones, and more like the Jetsons, to be able to talk to these new clients. Seriously.  We are not making this up. The idea that seeming tech-savvy can be learned from a 1970s cartoon – that will go over well in the Valley. Here’s the link. We don’t want to pick on the writer (much), but sometimes a detail is very telling. The reference […]

Does Your Financial Advisor Think You’re Clueless?

Wealthfront’s CEO Andy Rachleff published a column last week on Forbes.com about how this generation of IPO wealth may help transform the business of money management. It offers a sharp contrast to the attitude that many Wall Street brokers take toward their clients, which was obvious in an article that ran last week in the New York Times (more on that below). In Hey, Silicon Valley Engineers, Time To Toss Out The Bankers, Andy wrote: This era’s IPO wealth is being created by young, Web-savvy engineers who have a deep-set aversion to traditional, expensive ways of doing things. They also have a deep understanding of how to use the Web to manage all aspects their lives (and possibly yours – […]

Wealthfront In the News

Wealthfront in the News

Wealthfront: The Antidote To The Wealth Management Zombies On Jan. 16, in the new Pandodaily, Sarah Lacy wrote about the culture clash between Wall Street and Silicon Valley. Like Zombies single-mindedly trolling an apocalyptic wasteland for brains, the wealth managers are coming. They’re staggering all over Silicon Valley with dollar signs in their sunken, dead eyes, muttering, “New millionaires.” … But there’s another way to combat the zombies: Manage your new riches on Wealthfront instead. Last December, the site launched a new Online Investment Advisor aimed at precisely this audience. I’ve long been bullish on Wealthfront, because I like the company’s long-term focus and its emphasis on killing middlemen who extract ridiculous and hard-to-understand fees. Sooner or later the Internet […]

Are There Socially Conscious Ways To Invest?

If you have a question for The Upfront Blog, please leave it in our comments section, e-mail betsy@wealtfront.com or send it via our twitter feed: @wealthfront. Are there socially conscious ways to invest? -Kara Bloomgarden-Smoke, 26 The short answer is yes. But before you decide to practice socially responsible investing, you should carefully consider what exactly it means to you – and how much you’re willing to sacrifice in terms of money and transparency to follow your conscience. Socially responsible investing, or “SRI,” is defined as investing in which both traditional financial factors and ethical concerns are taken into account. Most people, when thinking about socially responsible investing, go straight to the conventional window on the issue: drop your money […]

Morningstar’s New Ranking System: Worthwhile?

Morningstar debuted its new mutual fund ratings systems this week. Everyone’s known for some time that the company’s widely used star system for ratings doesn’t work to predict future results any better than simply using funds’ expense ratios. Morningstar itself acknowledged the fact that expense ratios are a better predictor of performance. Even after that evidence, however, the Chicago-based company continued to use the stars, which are a signature of the company’s brand. Mutual funds continued to use the stars to advertise. And harried investors, unfortunately, still make many investing decisions based on them. As The Wall Street Journal reported when it wrote about the new system, We still get calls that say, ‘Hey, why haven’t you gotten me out […]

GenY’ers Freeze Up When They Should Be Investing

The extent to which the market’s volatility is contributing to the feeling of uncertainty was clear in a new survey released this week by Guardian, a life insurance company. Some 39% of Americans are overwhelmed by the idea of how to save for retirement, based on the survey of 1,202 people, which also looked at how the different generations view saving, investing and retirement. As you would expect, those closest to retirement are the most likely to be worried about having enough to retire. But Gen Y’ers also are worried and significantly confused about their finances in general. A higher proportion of Gen Y’ers, 75%, said that in light of the last five years they are more likely to park […]

This Week In Finance: PR Nightmares For Ameriprise, Netflix and OWS

Financial services giant Ameriprise has a very nice video on its web site, narrated in homey style by Tommy Lee Jones, leaning over a white picket fence. “This is a company … with a steadfast commitment to putting clients first.” That’s the marketing message, of course. But take a look at the lawsuit filed last month by employees and consider what those claims say about how the company treats its clients. Employees are demanding $100 million in damages because the company steered their retirement money into its own allegedly underperforming funds. Barron’s picked up the story last week: Late last month, Ameriprise Financial (NYSE: AMP) employees filed a lawsuit against their employer for offering Ameriprise funds in their 401(k) plan. […]