How Can Sincerity and Authenticity Actually Be Negative Traits in a Financial Advisor?

8

Share

Please like this post and click the share button above. Continual dispensation of financial truth contributes to massive pushback against this newsletter and makes the growth of my platform completely dependent upon your participation and word-of-mouth.

The rise of social media has been the greatest boon to Wall Street investment advisors in helping them maintain the revenues thrown off by AUM (Assets Under Management) since the multi-billion dollar financial lobbying industry helped legalize systemic criminal activities like frontrunning. Why? Because it allowed them to distribute their psychological con games much further and wider than just the few millions of people that comprise their clientele base worldwide. The biggest Wall Street firms like Goldman Sachs, JP Morgan, Citibank, Deutsche Bank, ABN Amro, Barclays Bank and so on salute the growth of the social media “financial analyst/advisor” for they have helped their business flourish in a manner that would not have been possible without the advent of social media.

For example, instead of the reach of the investment propaganda of JP Morgan’s 6,000 employees of their Wealth Management division limited to their approximate 684,000 clients in 60 countries as of 2022, the rise of the social media financial analyst has multiplied the implosion radius of Wall Street guidance from a few million clients, by spreading some of the worst investment philosophies in the world of perpetual hope and holding on forever, to billions of social media consumers in 194 nations. If you’ve ever listened or read the suspect investment guidance of the most popular financial analysts on every social media platform, their guidance sounds exactly like the “advice” dispensed by thousands of financial advisors at every Wall Street firm.

However, it is of my opinion that the vast majority of social media financial “analysts” that dispense guidance have zero concern for the negative outcomes their guidance produces, but only care about maximizing the advertising revenues they earn, just as global corporate financial advisors only care about maximizing their AUM. In the end, it matters not much to them whether you earn profits or lose big with them, as long as you keep going back to read their articles and view their videos. Why do you think so many social media financial analysts have repeated/are repeating the exact same garbage analysis as big Wall Street financial advisors during the midst of this asset crash right now that have turned small initial 10% losses into massive 30% to 70% losses? It is because their “hold on” guidance keeps

(1) hopium alive;

(2) their millions of followers returning with bated breath for their next video; and

(3) their massive income streams alive and growing

Though some may point out the flaws in my argument with professional investment advisors by stating the obvious - that if their AUM goes down by 30%, then their payouts, based upon AUM, also decrease proportionately - while this is a solid argument, it is exactly why every financial advisor engages in cross-selling many other products (life insurance, bonds, bank accounts, mortgages, CDOs, MBS, CLOs, interest rate swaps, ForEx products, etc.). It is also why the biggest corporate investment firms are always pushing new products that produce additional income streams that will provide them with an adequate cushion of profits that can be degraded when asset prices collapse after they’ve convinced the majority of their clients to “hold on” because doing so is “in the client’s best interest”.

Have you ever thought that when JP Morgan introduced crypto products to their clients and their colleagues followed suite, that this abrupt change of heart wasn’t because of their desire to help cryptocurrencies gain mainstream acceptance as a fiat currency alternative and an “awesome, positive” development for BTC and ETH, as pitched by nearly every online cryptocurrency news website? Instead, did you ever stop for a moment and consider the possibility that perhaps Wall Street’s sudden about-face regarding cryptocurrencies was due to its view of the cryptocurrency arena as an easy cash grab given the cult-like fervor of many of its investors, and simply an easy way to separate new clients from their money, as has just happened over the last eight months?

And why do you think, in spite of the cryptocrash that has materialized, that Goldman Sachs announced this month that they are considering offering cryptocurrency derivative trading? Just a couple of days ago, I explained that the reason some of the most popular DeFi cryptocurrency trading platforms offered insane amounts of leverage in derivative trading accounts was because derivative trading accounts are one of the easiest ways to separate clients from their money. Frankly, given the rapid growth of the market cap of the crypto industry before its recent collapse that wiped out trillions, I was shocked that JP Morgan, Goldman Sachs, Citibank and others did not climb on board the crpto train earlier than they did.

And while these arguments apply to professional investment “advisors”, since social media financial “analysts” income is never degraded through their followers’ loss of wealth, as they possess no AUM, their goal is simply to keep amassing more followers, which they skillfully achieve despite their often consistently wrong financial analysis.

Conclusion

In tying everything together, can sincerity and authenticity, two of the most hyped and lauded concepts for content creators over the past few years, actually be bad traits for which to search among the thousands of financial analysts that only rose to prominence due to the rapid growth of social media platforms in the investment landscape? Can one not use sincerity as a key character trait in order to weed out the 99% of bad fnancial analysts on social media platforms to find the 1% of the good ones? Let’s explore the answer to this question in today’s podcast. There’s a massive distinction between sincerity and truth when it comes to doling out solid financial advice, and understanding the difference can be the difference over time between investment losses or massive investment gains.

If financial analysts with millions of followers on social media ever publicly disclosed the enormous income their platforms generate in advertising revenues every year for them, sums that likely more than compensate for the disclosed amounts of their investment losses during this recent round of carnage, then all of a sudden, their “sincerity” in disclosing their portfolio losses may come into serious question. So, for those that are still pushing hopium and holding on for a rebound that may never come, ask for disclosure from these social media analysts of their annual income produced by the channels you visit, and if you receive crickets in response, then you know the answer to the “sincerity” question.

Coming Tomorrow: The Most Important Article You Will Read All Year, Part II

skwealthacademy by J. Kim is a reader-supported publication. To receive financial news and truths no one else is willing to discuss and to support my work, consider becoming a paid subscriber.

Disclaimer: None of the information distributed on the skwealthacademy substack platform qualifies as investment advice. Please refer to our “About” page for the full disclaimer.

Access more skwealthacademy content through my other platforms: The production of all my public content is 100% reader supported. A huge thanks to all my current supporters. For investment analysis and tips every week and month, join my patreon platform here. All memberships at the Benefactor membership level and below will be indefinitely capped at their current level, so the only possible way to join my patreon platform in the future, at these levels. will be by joining when someone leaves, which is most possible during the first week of every month. Memberships at the Top Supporter level and above still remain open. To donate to the launch of my upcoming wealth building Academy, visit my gofundme campaign here, and to download a fact sheet to learn how my soon-to-be-launched Academy will radically alter business education forever, click here. If you’ve never followed me on Twitter, follow me now as I am re-starting my account. Help me discover if my twitter follower count has finally been uncapped after having been capped for 10 years.