Good list here with some familiar names including Barry Ritholtz, Josh Brown, Tom Brakke, Robert Seawright and Michael Kitces. I’m also bunched in there with some quotes about why I moved increasingly away from the wirehouse business model:
Roche says he fell into the industry after working at Merrill Lynch for three years managing $500 million for clients, and becoming “disillusioned with the business model.”
“I had hoped I could build a business model that was more client-driven, so I started my own business as a registered independent advisor. Now, I do pure consulting for institutions and retail clients, and conduct macro research.”
Like many other bloggers on this list, Roche’s website, Pragmatic Capitalism, grew out of the financial crisis. Where did the traction come from? “I was extremely worried about the housing bubble between 2005 and 2008. My background has come from understanding the monetary system, getting down into the mechanics of the banking system, and I viewed what was going on in a different way from other people.”
He continues: “I started working from the premise that the government was misinterpreting what was going on in the crisis because the diagnosis of the problem was wrong and the response was therefore misguided.”
One of the reasons Roche transitioned to becoming an independent advisor was because of his perceived conflict of interests that exist at big Wall Street firms. “Those big firms are revenue-driven – they’re fee generators. They’re not able to do what’s in their clients’ best interest – a lot of the time the best interest of the client is to reduce fees,” he notes. According to Roche, the financial advisor model needs to change, with more and more advisors needing to act as independent consultants or fee-only advisors. “I think the conflict comes mostly from the big wirehouses: public companies that need to maximize profits – profits largely derived from generating fees from clients,” he concludes.
Mr. Roche is the Founder and Chief Investment Officer of Discipline Funds.Discipline Funds is a low fee financial advisory firm with a focus on helping people be more disciplined with their finances.
He is also the author of Pragmatic Capitalism: What Every Investor Needs to Understand About Money and Finance, Understanding the Modern Monetary System and Understanding Modern Portfolio Construction.
Comments are closed.