Mortimer, We're Back: Return of the Broker

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I saw a piece in the Journal today that blew my mind.  After everything we’ve been through since the fall of 2007, retail stockbrokers have begun to leave their turrets in big numbers this spring:

From the Wall Street Journal via Barry Ritholtz:
In April, more than 2,800 people registered as brokers in the U.S. left the industry, according to the Financial Industry Regulatory Authority. The total number of departures so far this year stands at 11,600. In 2002, the previous high-water mark for industry exits in the 15 years of data available from Finra, a total of 11,500 brokers left Wall Street.

Bad timing, guys.

“Our Thing” is just starting to get good again.

High net worth investors in America have woken up to the fact that their over-compensated, under-regulated hedge fund whiz kid manager is really just a bourgeois pig with a fancy degree, taking all of the credit (and profits) in good times and walking away in bad times.

Clients and wealthy people I speak with all over the country are shaking off the hedge fund/private equity hangover and looking to get back to basics…buying good companies when they’re cheap and selling them when they’re expensive, and that’s what brokers do.

I’m pretty proud of my corner of the industry in that we had absolutely NOTHING to do with the 2008 credit crunch, yet we were the guys and gals on the front lines day in and day out, holding our clients’ hands and making suggestions, under the worst possible stress imaginable.

We were the ones who took every freaked-out phone call and devised strategies to fix what wasn’t working on the fly when the world looked like it was coming to an end.

And now, the brokers and advisors who stuck by their clients instead of avoiding their calls or throwing in the towel are gonna get big and get paid.  We deserve it.

And the “sexy” hedge funds, stuffed to the gills with bullsh#t derivatives and layers upon layers of leverage, have, for the most part, been defrocked.  80% of the Greenwich Emperors had no clothes, and they will never have money thrown at them like that again.

The young gunners didn’t know a damned thing, other than how to get a job at a hedge fund after spending 9 months on a trading desk.

You can take your black box quant formula and eat it, Chester.  Transparent, vanilla investing is the new hotness.

Brokers and advisors thinking of departing the business: Look back at what you’ve already made it through over the last 2 years and think twice before abandoning your clients, who will look to you for guidance…now more than ever.

Full Story: Brokers Leave Wall Street (WSJ $ubscritpion req)

What's been said:

Discussions found on the web
  1. Joshua M Brown commented on May 07

    great commentary, thanks for the response guys.

    i cant speak for the types mentioned in your comments, i can only say that no broker should have thousands of relationships at any one time (unless he has a team), impossible to do a good job for any of them if thats the case

    also, that positioning you mention is pretty funny…does he own both at once for the same account? that would be madness!

    lol

  2. Joshua M Brown commented on May 07

    great commentary, thanks for the response guys.

    i cant speak for the types mentioned in your comments, i can only say that no broker should have thousands of relationships at any one time (unless he has a team), impossible to do a good job for any of them if thats the case

    also, that positioning you mention is pretty funny…does he own both at once for the same account? that would be madness!

    lol

  3. Joshua M Brown commented on May 07

    great commentary, thanks for the response guys.

    i cant speak for the types mentioned in your comments, i can only say that no broker should have thousands of relationships at any one time (unless he has a team), impossible to do a good job for any of them if thats the case

    also, that positioning you mention is pretty funny…does he own both at once for the same account? that would be madness!

    lol

  4. Anal_yst commented on May 07

    He owns both positions in 2 separate accounts!

    I’ve said it many times before, like in many professions, I don’t doubt there are some very good brokers, but as far as I can tell, in terms of sheer #’s, they’re ranks are severely outnumbered by the mediocre and crappy ones, sigh…

  5. Anal_yst commented on May 07

    He owns both positions in 2 separate accounts!

    I’ve said it many times before, like in many professions, I don’t doubt there are some very good brokers, but as far as I can tell, in terms of sheer #’s, they’re ranks are severely outnumbered by the mediocre and crappy ones, sigh…

  6. Anal_yst commented on May 07

    He owns both positions in 2 separate accounts!

    I’ve said it many times before, like in many professions, I don’t doubt there are some very good brokers, but as far as I can tell, in terms of sheer #’s, they’re ranks are severely outnumbered by the mediocre and crappy ones, sigh…

  7. ex_wirehouse commented on May 07

    can only say that no broker should have thousands of relationships at any one time

    Unfortunateley that is the industry norm now. The expectation is that they will all be wedged into some bland commoditized product, consisting of two flavors, bland and tasteless. Client contact is hoped to be minimal. As i said earlier, it is a wretfched condition.

  8. ex_wirehouse commented on May 07

    can only say that no broker should have thousands of relationships at any one time

    Unfortunateley that is the industry norm now. The expectation is that they will all be wedged into some bland commoditized product, consisting of two flavors, bland and tasteless. Client contact is hoped to be minimal. As i said earlier, it is a wretfched condition.

  9. ex_wirehouse commented on May 07

    can only say that no broker should have thousands of relationships at any one time

    Unfortunateley that is the industry norm now. The expectation is that they will all be wedged into some bland commoditized product, consisting of two flavors, bland and tasteless. Client contact is hoped to be minimal. As i said earlier, it is a wretfched condition.