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Joshua Brown spent the first decade of his Wall Street career trolling for wealthy clients on the phone as a stockbroker. Then in the market melted down, along with the portfolios of many of his customers. It was a searing experience for him. Today, Brown blogs about Wall Street as The Reformed Broker and is a fee-based financial adviser at Fusion Analytics Investment Partners, a New York-based asset management firm. And he is still grappling with his past.

He talked to me about the book and how he hopes it will change Wall Street culture. The only thing I ever wanted to do was work on Wall Street. The dot-coms were flying. The guys were making their clients money, and they were making themselves money. People were starting up firms out of thin air. There were a bunch of people from my town, Merrick, N. I knew their families.

They were knuckleheads in high school, now they were driving Porsches. It was definitely seductive.

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They are managing hundreds of different accounts, each one is different. So I think it starts with a lie. What sort of excesses did you personally witness when you got into the business?

The boiler room era had ended by that time, but the sales tactics were the same. We are in the moving business. Keep the trades going and the money moving. There are guys in downtown Manhattan right now who are using those same sales tactics to sell private placement shares in Facebook. I took decades of sales scripts that I collected over the years, wrote the definitive version, and I published the whole thing for the first time ever. This pitch enables a broker to keep them on the path to a closing.

A client would get on the phone and you could pitch them Intel or Google, whatever the stock is. If I do a good enough job for you over the next few months and you want to expand that relationship to include your wife, that would be great. I think it used to work. If you look at how many of these firms are closing down, it probably works a lot less now.

They are not getting shut down because of regulatory violations. They are shutting down because they are running out of money.

The model of making phone calls a day and getting 50 people to pick up the phone and getting five of them to be maybes and one to say yes is almost impossible in the age of cell phones and e-mail. In , everything really crystallized for me. The market was melting down.

“Show me the money!” – A Stockbroker’s Story |

But at the retail brokerages, there were analysts still picking stocks. This has nothing to do with taking care of clients and everything to do with generating gross commissions.

I put people into cash in some instances. I tried to put some people into gold and bonds. You put all your clients in cash, you are going to end up going to the soup kitchen. So, ultimately, I became a fee-based financial adviser, where there is no incentive other than to help your client hit their goals. The book, to some extent, is a redemption story. I made every mistake you can make.

I believed a lot of the lines I used. It had to come out somewhere. Every affluent person in the country has gotten that call. Some of them will be able to recite the lines word for word. The way it is used with such cruel efficiency is going to freak them out.

I think a lot of brokers are going to have to change their ways.

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Swim With The Sharks As A Stockbroker

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