Call it “Levitt's smackdown.” In his new book, the former SEC chairman writes, “Brokers may seem like clever financial experts, but they are first and foremost salespeople.” This book, a timely release by the longest-serving SEC head ever, is a kick in the teeth to brokers, Wall Street, corporate executives — even former colleagues.
Indeed, that's the fun stuff. (Levitt dishes on Launny Steffens, former head of Merrill Lynch's brokerage unit; Sandy Weill, a former business partner; and Hardwick Simmons, the Nasdaq CEO who worked for Weill and Levitt's firm, Carter, Berlind & Weill.)
The book is aimed mainly at Main Street, dispensing advice to retail investors on loads and the like. The overarching point: The game is rigged against them. It's not nice to you the broker, but because of the straight-ahead writing style, reps should enjoy (hating) it.
In How to Sleep as Well as Your Broker (the chapter that any broker might be inclined to read first), Levitt concludes that the industry still has numerous flaws. That's not exactly a breathtaking criticism. It's just that Levitt makes a strong case and does it with evident zeal. “The system in which brokers operate,” he writes, “is still geared toward volume selling, not giving objective advice.” Hey, hasn't he heard of the wealth management model?
He laments the Street's resistance to the Tully Commission, the rise of online trading, SIA lobbying, shady accounting and much more. But Levitt is critical of himself, too — after all, lots of this stuff went down while he was on duty.