This ought to be good -- at least for my business. We got a deeper glance inside the inner workings of one of the country's largest financial institutions with the release of Greg Smith's book, Why I Left Goldman Sachs: A Wall Street Story. Based on his previous op-ed in The New York Times, it's safe to say it was not a flattering portrait.
Mr. Smith's allegations against his former employer have done irreparable harm to the financial services sector -- particularly for big firms like Goldman. I don't mean to say that any of this is Mr. Smith's fault. Rather the blame should be laid on the selfish mentality that brands clients as "Muppets" and focuses solely on earnings instead of clients. It's a problem that runs rampant through the financial sector.
The odd part of this: Mr. Smith may have done my business a favor. The article has served as a wake-up call for investors, who are learning that bigger does not always mean better. Smaller, independent firms like mine are growing, as clients leave Goldman Sachs and look for sound, trustworthy financial advice. My door is always open.
I've seen a lot over the past 25 years as a wealth manager. I've seen financial planners come and go. I've seen get-rich-quick schemes fizzle and die out. I've seen high-cost investments that offer the illusion of high returns and low risk that inevitably fail to deliver on their promise. I've steered my clients away from shady investments and more importantly, I've always kept them and their best interest at heart.
Wealth management is about helping clients use their wealth to build more meaningful and satisfying lives. The measure of a great wealth manager is not how much income he generates for his firm. Rather, it is about his ability to help his clients use their wealth to build the life they desire, to enhance the lives of the people they love, and to establish a living legacy that represents their passions and values.
Of course, before we can help clients, we have to attract them. Through the years, I've learned a thing or two about that as well. Succeeding in finance, as in any business, is about cultivating a brand and building trust. Goldman did that but lost it.
As the CEO of an independent financial services firm, I know that the company's brand starts with me. I've worked tirelessly to make sure our internal culture matches our public message. Many people did the same at Goldman Sachs over its 143-year history. Brands take a long time to build, but only a moment to shatter.
The revelation of Goldman's unethical culture is bad for America. Investors lose faith in the financial markets when they feel the system is rigged against them. Our financial system becomes less efficient and it becomes harder for businesses to get the capital they need to grow and flourish. Lost trust in Goldman does not crash the market, but it certainly forces investors to be a little more hesitant. Capitalism is extremely efficient, but it is a system built on trust.
My business also relies on trust. I trust my employees to carry out my vision for the company. In turn, my clients trust us with their hard-earned money. Without trust this process would come to a screeching halt. Once lost, trust is difficult, if not impossible, to regain. Ask someone whose marriage has been broken up by infidelity. Ask someone whose children have been caught abusing drugs. The relationship with a financial adviser can be just as important and relies on trust to be successful. Put your money where you put your trust. Don't be a Muppet.
I truly believe the financial services industry can flourish in the years to come and be incredibly profitable. In an increasing digital age, where everything is automated, there is still room for a long-term relationship with a trusted financial adviser who cares about you, an adviser with the wisdom and knowledge to help you move from fear to confidence as you use your wealth to build the life you want. By focusing on the "service" in financial services, the industry will grow and prosper, while our clients do the same.
The key to doing well is doing right. By doing right, trust will come and a brand will be built. That's what I've seen and what the people at Goldman are beginning to learn. I guess I should say, 'Thanks for the business, Goldman.'
David Geller is the author of Wealth & Happiness: Using Your Wealth to Create a Better Life. He also serves as a motivational speaker and the CEO of Atlanta-based GV Financial Advisors. His new book is available at Amazon.com or at www.gvfinancial.com.