Investor Stereotypes

Stereotypes are sometimes programmed into us and they often lead to actions that are harmful to all concerned.  I have always believed that having an open mind and not judging others based on their gender, race, religion, or sexual preference is not only morally correct, but it enables us to know one another as individuals.  Although we have a long way to go, I believe that as a society we have made a lot of progress regarding relationships with those who may not be just like us.

As a financial advisor, when developing an investment strategy for a new client, I would always begin by discerning the “client profile.”  Assets, income, dependents, age, risk tolerance etc. were the variables I would use to build their investment strategy.  The client’s race, religion, gender or sexual preference was irrelevant to their needs as an investor.

But the clever folks on Wall Street seem to think that reinforcing the stereotypes that segregate us can be used to make a buck.  According to an article in the New York Times last week, “firms are creating units to serve a variety of ethnic groups, races, genders, and members of the lesbian, gay, bisexual and transgender communities.”  As if the investment needs of each group are unique.  As I read the article, the marketing folks creating these strategies, mentioned, for example, that Chinese like to gamble so they need investments with more risk and African American’s supposedly prefer real estate rather than equities.  And they believe that each individual investor may prefer to work with their own kind.  Perhaps they are right, but for me there is a huge disconnect with what should be the role of an investment advisor, and that is to help individuals have a “successful” investment experience.

As I was writing this I realized that I have my own stereotype to deal with-“Wall Street Bankers.”  I can’t get past my belief that they will always put their own profits ahead of their clients’ interest and sell investors whatever they want, even if it’s not appropriate for them.  I have an open mind but unfortunately, “Wall Street” continues to reinforce this stereotype.

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I hope you had a great Thanksgiving!  It was very special for me as my daughter, Leslie, brought a new grandson into the world.  My portfolio is now rather skewed with four boys and only one girl but it works for me.