Wall Street

“We do better when you do better” is the corporate motto of Fisher Investments. Its omnipresent TV commercial shows non-Fisher investment advisors astounded that Fisher does not steer customers into high surcharge accounts or into its own investment portfolios. A Fisher VP (with remarkably bad teeth so you know she is real and not an actress) replies. “We are a fiduciary only serving our clients’ best interests.”

“Then how do you make money?”

“We do better when our clients do better.”

Doesn’t that sound great? When the market is up, everyone is happy. In 2021, Wall Street financial firms showed profits of nearly $60 billion. The average bonus paid to investment industry employees was $257 K. That will make for a very merry Christmas.

The average 2021 bonus was about 20% higher than that paid in 2020 which makes sense since the Dow Jones Industrial Average increased by 18.7%in 2021.

Hard times are coming for Wall Street. The Dow is down 10% so far this year. Does this mean that stockbrokers will be hanging out at street corners dressed in rags begging for loose change come Christmas, 2022? Actually, they will probably have to make do with a 10% smaller bonus and only have about $225 K to buy that goose for Tiny Tim’s dinner.

The woman with the bad teeth is correct. Stockbrokers do better when their clients do better (and markets are up). She is not telling us that stockbrokers still do OK when their clients take a 10% bath on their investments.

By Ed Dufton