Editorial by exiting Goldman Sachs exec probably not shocking to many
By Dave Scranton
Based on my general philosophy as a financial advisor, I think it would be remiss of me not to comment on an editorial the New York Times ran last month entitled, “Why I am Leaving Goldman Sachs.”
It’s hard to imagine anyone in our industry having missed the piece, but just in case, I’ll provide a brief synopsis: Goldman Sachs executive Greg Smith announced he was leaving the multinational investment firm after 12 years because of a “toxic and destructive” work environment.
“To put the problem in the simplest terms,” Mr. Smith wrote, “the interests of the client continue to be sidelined in the way the firm operates and thinks about making money.”
Of course, an editorial is only one man’s opinion, and after the piece ran others naturally weighed in with opposing views. And even if the examples Mr. Smith sites about “callousness” and “eroding integrity” at Goldman Sachs are accurate, one could certainly argue it would be unfair to impugn all of Wall Street based on one man’s account of his experience at one firm.
On the other hand, unless you’ve been living under a rock for the past decade or so, you probably realize that the words integrity and Wall Street aren’t exactly synonymous these days to begin with. No one knows this better than Wall Street executives, themselves, and many were quick to loudly proclaim their own companies’ commitment to clients in the wake of Smith’s article.
“Even bankers who disagreed with Mr. Smith’s conclusions said the piece had struck a chord because it stirred up their own doubts, especially in the wake of the financial crisis,” Nelson D. Schwartz wrote in a follow-up Times article.
Personally, I’d be willing to bet the reaction of most Americans to Mr. Smith’s revelations was far from shocked. It was probably the same reaction most of us have when we read about the latest politician or Hollywood celebrity embroiled in some ugly new scandal, which is: “Yup, that sounds about right.”
Naturally, the impulse for an advisor like me, who specializes in non-stock market investment alternatives, upon reading the piece was to ask myself, how can I leverage this? After all, as author of a book on the issue, my own opinions about Wall Street ethics and its overall concern for clients are well documented.
In the end, though, I have resisted the urge to print out thousands of copies of Mr. Smith’s editorial and drop them from a helicopter with my business card attached. One reason is that I not only have access to, but specialize in, marketing strategies far more sophisticated than that.
But the main reason I haven’t used the piece in any way is that I don’t really need a disgruntled Wall Street executive who’s finally seen the light to help me steer prospects and fellow advisors in the right direction. I saw the light, myself, 15 years ago, and since then have created enough informed, enthusiastic advocates among my own clients and business protégés, that I’m content to let Mr. Smith’s editorial simply speak for itself.
And I’ve created all of these advocates and ambassadors by doing the very thing Mr. Smith accuses his former employers of not doing, which is making sure that clients are “the focal point of my business.”
“I hope this can be a wake-up call to the board of directors,” Mr. Smith concludes in his piece. “Without clients you will not make money. In fact, you will not exist.”
So I guess my overall comment on Mr. Smith’s editorial is simply, “Well said.”