Click Here to view the Wall Street Journal Article that Steve was quoted in.


Hi, I’m Steve Dudash at IHT Wealth Management. Welcome to this week’s Wealthcast. Earlier this week, I was in the Wall Street Journal. Again, quoted- this time talking about some of the sales tactics and things that took place- I used to be at Merrill Lynch, talking about that and some of the other Wire House and Banking Institutions- they kind of all do the same things. And specifically, what we were talking about was the product selling, the pushing that is put on the Advisors to then sell products to clients.

So I thought this week, we’ll pull the curtain back a little bit and help you guys understand what’s going on at these places and see if it applies to your situation, and how maybe you can address it. Specifically, let’s just be honest- all Banks and Wire Houses, they’re all the same. You have an investment account, they want you to have savings accounts too, credit cards, or mortgages, or lending, or whatever- and specifically, what the Wall Street Journal Article was talking about was securities-backed Lending, which quite frankly, is not a bad option for a lot of people.

What it is, is- it’s an investment account, you know you’ve got say an investment account with a million dollars in it, you can borrow $500,000 off of that investment account and do whatever else you want to do with it, like a house or things along those lines. Again, not bad for the wrong person, the problem I had, the problem that a lot of people with what they’re talking about in that article is that it’s being pushed on everyone. So, an Advisor has pressure on him, you know what I mean- from the bank let’s just call it, to push a product and they do it, not usually for money, they don’t really give you money on it, but it’s usually like deferred comp, or bonuses, or some back-end tiered structure.

They want all of their clients to have savings accounts. They want all their clients to have credit cards and so they tell me to go do that with all my clients, and you know once my eyes started getting opened up to what was really going on at a corporate level there, you know you take everyone out of it, the ones who needed it, we left them in there, but everyone else you just kind of get out of it. And they didn’t lose any money by doing it, there wasn’t any fees associated with it, but it’s just not necessary. Y

ou and everyone out there, probably at some point have had people pushing products on them, or trying to sell them something. Why I’m saying this is, if they are trying to sell you something- as opposed to your Advisor or your Consultant, it’s probably for a reason. They are probably being incented on it at some point, and then you’ve got to ask yourself- “Are they doing it for them? Or are they doing it for you?” And that’s the big point I want to make, and what the Article was really trying to make and I’m sure it’s popping up here somewhere, make sure when you’re doing something, that it’s in your best interest for you to be apart of that, not the corporate structure around whoever that Advisor is, their best interest.

There’s a lot of wonderful reasons why you need a checking account, a savings account, credit card, lending, investments, all the different things that these institutions provide. But not everyone needs to do it. So ask yourself, “Are you getting yourself into something because it’s good for you? Or is it good for the firm that is apart of that?” If you ever have any questions on it, or if you want another opinion, call me anytime, email me. I’m sure all that stuff is popping up, including the Wall Street Journal Article Link here at some point. So, I hope you have a nice weekend and I hope this helps. And we’ll talk. Have a nice one. Take care.