The Verus Team

Too Big to Care – Until Proven Otherwise.

Written by: Derek Majkowski. Any opinions are those of Derek Majkowski and not necessarily those of RJFS or Raymond James.

The recent news and scandal at one of the large financial services firms has shed light publicly on a situation that has long been felt behind-the-scenes by many advisors for years.  That is, following the financial crisis, the big firms got bigger, and the focus shifted from client – advisor relationships to that of a shareholder - bottom-line focus. 
 
As is coming to light from the news, the bullying, high-pressure sales tactics created a culture where lower level employees were forced to expedite practices that enabled the creation of these false accounts.  Accounts falsely created in order for an employee to hit goals, or reach minimum performance levels.  In such, management and shareholders reaped great gains in stock price valuations and bonuses.  

It created a culture that placed the priorities on firm initiatives vs. those of customers, and put pressures on employees to play ball, or face internal pressure for questioning the practices or not complying.  This led to lower compensation for employees, internal disciplinary action, or attrition.  Actions that to date, thanks to very public pressure, has just started impacting some management and leadership.

A firm that puts corporate initiatives ahead of client needs, displays an arrogance that facilitates these “Too Big to Fail” companies to also displaying a too big to care mentality.  This culture has enabled these organizations to create these high-pressure sales environments and putting questionable, self-serving behaviors, ahead of sensible client-first practices.  

We could no longer stand being a part of the too big to care firm, and chose to leave and take the majority of our practice with us.  We realized the only way these behaviors really change is when customers and clients finally leave with their relationships and business.  Until that happens, firms like this will keep doing what they’re doing, because it hasn’t hurt them where it counts – their bottom-line..


This information does not purport to be a complete description of the developments referred to in this material, it has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete.