Paul Meloan – Vested Interest

When Paul tweeted Sallie

Wow, it looks like I just picked my first Twitter fight.

In the little world of personal finance, Sallie Krawcheck is famous for being, well, famous.  She received a lot of prominence over a decade ago for trying to give thoughtful investment analysis of companies, while others in her field were perfectly willing to say whatever had to be said (I am looking at you Henry Blodget) in order to raise investment banking business (read: $$$) for their firms.

Sallie parlayed that into some very prominent positions at some very prominent firms.  At a very young age, she reached positions of senior management at some of the biggest names on Wall Street: Sanford Bernstein, Smith Barney, Citigroup, and Bank of America/US Trust/Merrill Lynch (after their financial-meltdown inspired shotgun marriage).  She also didn’t last very long at any of them.

But Krawcheck is now between gigs, and has some time on her hands to contribute blog pieces to places like LinkedIn, one of which passed my desktop last week. Here is that piece. Reasonable, if vague advice.  The problem I had was that she made millions of dollars leading organizations that were devoted to doing anything but these five things.  And not just one organization, all of them.

Since I follow her Twitter feed, I posted a query, admittedly with a gentle sprinkling of snark attached: (CLICK IMAGE TO ENLARGE)

Sallie Twitter conversation

Now I am blocked.  Cold shoulder.

Sadly, I bet we would get along nicely if we ever met. Her profile highlights her background as a runner (which I dig) and she currently boasts of an unhealthy following of her beloved UNC Tar Heels, which I can understand and forgive.  I think we were both quite happy when Duke lost yesterday. (Go Blue!)

She made a lot of money on Wall Street, both before the 2008 meltdown and after.  She was paid more money when she got fired by BoA than most Americans will ever see in their lives.  This is on top of the millions she undoubtedly made in senior management positions in the prior decade.
From where I sit as a real advisor giving real advice to real people, it would have been nice if one of LinkedIn’s “Thought Leaders” hadn’t made millions from an industry that refuses to embrace a fiduciary standard, and ultimately stands apart from their clients, not with them.  If perhaps Krawcheck had not made millions as the head of sales organizations that reward sales at the expense of clients, this would not have rung so, so hollow.
Sallie even went so far as to send me a note citing her work in favor of Wall St adopting a fiduciary standard.  Sorry, Sallie, not buying that. We try to teach our clients that what people say should be valued at a great discount compared to what they do. Sallie can’t cash checks for millions of dollars written by folks that she claims to be opposed to and still pass the smell test.
I hope Sallie will take to the keyboard and tell me why I am wrong.
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Paul Meloan is the co-founder and co-managing member of Aegis Wealth Management, LLC, in Bethesda, Maryland USA. Before Aegis Paul was a practicing attorney as well as working in the tax practice of Ernst & Young, LLP.

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