Changing the dark culture of Wall Street
When people hear news of eroding corporate culture, it's not uncommon to associate that with the likes of major financial institutions, a.k.a., Wall Street. It was them that brought us the Great Financial Crisis in 2008, as banks created bad debt and resold them as high-grade investments (^1). What may be less known, however, in the wake of the #metoo movement, is that Wall Street is again at the forefront of sexual harassment and bad behavior, re-illuminated by the recent investigative report, "Inhuman Resources," by HuffPost (^2)
If you would like to see a change in corporate culture then you should know that you can make a difference. You might be thinking of roadblocks as the big banks are involved in most aspects of our financial lives, from running payroll to ATM's. Although it's true that the big banks have some of the largest government deals and they run much of our infrastructure, you still have options.
Where you do business matters. Many consumers feel “safer” with bigger banks, despite their reputation for deviousness. Should there be a shock to the economy, for example, they reason that their money would still be fine. They’ve also mentioned easier access to their money as the bigger banks have the most branches and ATMs. These feelings are no longer supported in fact. Some of the world’s biggest firms, Lehman Brothers, Bear Stearns, and many others, collapsed during the Financial Crisis. Branches are no longer necessary as banking can be done entirely online, from mobile check-deposit to accessing ATM’s globally, often with little or no cost. Both big and small banks offer the same level of government insurance, FDIC, that protects the first $250,000 per account. There is no longer a substantial reason to keep your business at a large bank.
At Eureka Wealth Management, I am an independent, registered investment advisory and financial planning practice. I custodian clients’ investments at Betterment which prides itself as an alternative to Wall Street (^4). We use low-cost index funds, instead of mutual funds, and I manage risk by utilizing asset classes. I explain options on where clients can take their business, and let them know if that business meets their moral code. Keep your business with the independent, smaller firms. This has the power to change the culture of Wall Street.
^3 Financial Times dtd 5/17/18, "We need to change how maths is taught in schools" (https://www.ft.com/content/c1ebe9ac-52d4-11e8-84f4-43d65af59d43
^4 Betterment mission: https://www.betterment.com/mission/