Hurricane Sandy has kept me off line this week, but I am back. I received an email from Rick Rummage, of the Rummage Group, a recuriting firm specializing in the financial industry. I am running this letter Rick sent because, well, it's not about the hurricane that decimated the East Coast and Staten Island and other parts of NYC (and bent street signs and sent at least one street sign flying down the avenue here in Brooklyn where I live). Rick, a veteran financial specialist, who has worked as an advisor, a branch manager for a wirehouse for a couple of decades, makes an interesting point about the election and about how Wall Street firms compensate their FAs in opposite way than Washington taxes us.
Regular readers will know that I do write about investments and the retail financial advisory business, but I do so from a Libertarian vantage point. No need to read further if you are an Obama fan.
The Election Of Our Lifetime
By Rick Rummage
Growing up my father was the Chairman of The Economic Matters Committee in the Maryland House of Delegates. He was a democrat, but would be considered a “Blue Dog Democrat”. I grew up knowing that my team was the Democratic Party. When I was young I did not know the issues or facts. When I entered college, I started following politics and studied economics, finance and psychology with great enthusiasm.
By the time I went to college, I had already owned two small businesses. I was not there to just take a bunch of courses and get a degree, but rather truly learn. It was during this period that I realized I was neither a Democrat nor a Republican, but rather an American that believed in free market capitalism.
The wealth management community understands free market capitalism better than most Americans. This industry is made up of individuals that know you can do anything you set your mind to with hard work and determination. Most understand that we don’t all start at the same starting line, but we can all end up at the same finish line. This industry knows that nothing starts until somebody gets up off the couch, works hard, takes risk, becomes innovative and ultimately employs others. To get the highest standard of living for all, you must dangle the carrot of capitalism. No matter what a society does, there will be between 10 to 20% of the population that will decide to stay on the couch.
It’s funny if you think about it. Wealth management firms have about the same commission structure in all divisions. The small producers get to keep less and the bigger producers keep more. This is the opposite of our tax structure. These firms do this because they know you must dangle the carrot to get better results, and it works. However, our country with President Obama, has decided to focus more on those on the couch, than those that create jobs. We are actually at a point in history where it is ok to get on national television and insult those with success.
We must get back to focusing on the carrot of capitalism. We must all once again admire and respect those that get up off the couch. We should do whatever we can to encourage more individuals to start businesses and take risk.
Rick Rummage is the founder and CEO of The Rummage Group, a recruiter specializing in the financial industry. www.TheRummageGroup.com