The News: Still More Brokers May Flee Big Wall Street Houses
Today's trickle of top-producing brokers defecting from wirehouses to independent firms could soon grow into a "flood," says Evan Cooper, deputy editor of Investment News.
In a scathing column, Cooper repeatedly equates the Wall Street oligarchy with the totalitarian government of the former Soviet Union. The few remaining big firms, he says, try to exert "total control" over their reps. Along with "KGB-like PR department(s)" that order their minions not to talk to the media, Cooper sees other similarities to the Soviet bloc:
Wirehouses are so afraid of defections that they discourage their brokers from mingling with brokers from other firms. They also broadcast subtle and not-so-subtle propaganda about independent firms...
Like Moscow in the days of the hammer and sickle, when select world-class musicians and athletes were allowed to visit the West to showcase communist accomplishments, wirehouses permit a few of their elite brokers to mingle with the outside world in safe settings.
Cooper sees that domination eroding. With wirehouse managements now more focused on other businesses such as credit cards and auto loans, "top brokers are more kings of anthills than mountains," he says. Couple that with wealthy clients' nagging jitters about whether their money is safe with a big firm, and he sees the ingredients of a much larger exodus than has been seen thus far.
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