In the summer of 1949, at age 17, I went to work in the International Department at Kidder Peabody. The department head was a family friend, and his secretary wanted to take the summer off. He invited me to learn the business as his typist, gofer and general assistant.
I learned what multi-tasking really meant that summer. No Internet; no computers. To watch for prices on six different stocks for six different clients, you had to give most of your attention to the ticker while answering the phone and, oh yes, writing a letter to a nice lady in Switzerland, explaining why she couldn't make a profit, after Kidder's commissions, by buying at 40 and selling at 40 5/8.
I also learned what makes a good broker. I don't remember any lectures; just a steady barrage of pointed remarks:
A good broker put his clients' interests first. (There were few her's in those days.)
A good broker recommended the best investments he could.
A good broker never, never churned a client's account.
Kidder's brokers were not expected to adopt this behavior out of the goodness of their hearts. It was a matter of enlightened self-interest.
This behavior, I was taught, would result in a broker gaining more and more clients through word of mouth. The firm would then notice a star in the making and start bestowing bonuses and other rewards. Still more clients would come to him. And that's how good brokers retired rich.
There was a stick to go with the carrots. Wall Street was a smaller world in those days. A broker canned by Kidder for behaving badly was unlikely to be hired by Merrill Lynch.
I've known some good brokers, and I bet there are plenty of them today: men and women who thrive by putting their clients' interests first.
So here's to the good brokers!
And a pox on the sellers of overpriced investment products who prey on elderly, unsuspecting bank customers!
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