Whether you are an advisor, insurance agent, stock broker, financial planner, or a Registered Investment Advisor (sorry if I missed a few titles), the impact of Madoff’s sociopathic greed has had a rippling effect throughout our industry.
For those of us who pride themselves on doing the right thing for our clients and putting their needs before our fees or commissions, I would like to say out loud, “Madoff is a Financial Kapo”! From the time his story hit the New York Times, I have had clients and prospects scrutinize any recommendations or suggestions with more pessimism than ever before.
While I am all for full disclosure and better educated consumers, there is a certain amount of dignity I believe I have earned after almost 25 years of helping families and the businesses they own. Financial Planning has been my family business for over 50 years, and we have remained conservative in our plan designs, recommendations, and advice. While we have watched about half a dozen of our contemporaries in South Florida have quicker success with more “Bling”, this same arrogance and disregard for the wellbeing for clients has eventually brought them handcuffs and prison time.
I am not alone! Many of the advisors I have worked with on an institutional capacity are in the same boat as I am. They have spent their entire lives doing the right thing, going above and beyond the call of duty to help their clients. One dirtbag like Madoff (the sheer magnitude of his Ponzi scheme is mindboggling) causes a backlash that really hurts the integrity what we do. “What is this Open Architecture platform you speak of? Didn’t Madoff do the same thing”? An annuity/Hedge Fund, didn’t Madoff offer the same thing his clients? These are questions we are fielding on a regular basis, and try to explain to the best of our ability. For Jews (like me) who built their business model on integrity first-client centric business consulting, what do we do and how do we handle this?
I have been very fortunate to have coached, mentored, and worked with thousands of advisors throughout the country in an institutional capacity, and most are feeling these same effects even if they are not Jewish. What used to be a rare discussion on SIPC protection and Lloyds re-insurance has become a staple of the first meeting introduction/Approach Talk. So maybe part of the answer is more detailed explanations of what we are doing for the families we work with. Possibly more patience, further transparency, and full disclosure will mitigate our client’s fears?
Personally, I do not understand how a Jew could destroy generations of Jewish wealth and defraud Jewish charities. We are a minority, we are targets, but most importantly, we need to support each other! In my opinion, Madoff is the equivalent of the “Kapo” during the Holocaust. He is the “Financial Kapo”. Unfortunately, he is not alone and monthly the news is filled with more cases of Jewish greed, damage to others, and financial improprieties. While Madoff may have been the worst, there are others who are damaging our reputation, and putting Judaism in a bad light.
To add oil to this fire, I read recently in The Miami Herald that several other Jewish “advisors” had been indicted in the creation of an $800 million Ponzi scheme that bilked hundreds of investors out of their life savings. Last week, in the Boulder Daily Camera, another group of dirt-bags from Longmont, created a Ponzi scheme to the tune of $18 million.
It is my opinion, that it is time to get back to the basics of who we are…..beginning with “Tikkun Olam”. The core of a Jew is Tikkun Olam! Throughout history, Jews have worked their way to the top of the social, political, and scientific world through a diligent work ethic and bound by the “original” ethical standard of “Tikkun Olam”. It is our duty and our responsibility to “Shed /share the Light” to our brothers and sisters throughout the world. However, part of our responsibility is not verbal, but to actually “Live it”, and have our lives be an example of righteous behavior. For example, I will be “gifting” a certain percentage of my income to a charity I am very fond of and believe in, as well as what they stand for. I am also working with my compliance department to be able to offer some “pro-bono” planning. Everyone one of us is different, but this is how I am rebuilding and giving back. I refuse to let one coward ruin my business and the reputation of my Jewish brothers in the financial services industry. We need to fight back with honesty, empathy, and be a light for others to follow.