As the author of The Reformed Broker, Joshua Brown is one of the top financial bloggers in the world. His blog is one of my daily “must reads”. Josh is also a contributor to the Wall Street Journal, Fortune, Forbes, Christian Science Monitor, Business Insider, StockTwits, and a regular guest on CNBC. Josh has also been known to appear on one of my favorite shows, Bloomberg Rewind with Matt Miller.
Josh spent the first decade of his career as a stockbroker on Wall Street. During the financial crisis of 2008, Josh began to question the brokerage model and eventually broke away and converted to an entirely fee-based practice. Today, he is a New York City-based Investment Adviser Representative for Fusion Analytics Investment Partners, a boutique wealth management firm. Josh recently joined the advisory board of Brightscope, where he hopes to help usher in a new era of transparency for the financial advisory industry.
Josh is the author of a new book, Backstage Wall Street: An Insider’s Guide to Knowing Who to Trust, Who to Run From, and How to Maximize Your Investments. I recently had the opportunity to ask Josh a few questions about his career, his new book, and what he’s learned about investing.
What’s your story? I understand you spent about a decade as a stockbroker, but you are now a fee-based money manager for a Registered Investment Advisor, Fusion Analytics. Please share a little bit about your career as a stockbroker and why you decided to make this transition to work as a fee-based financial advisor.
I kind of backed my way in to a career in the markets – originally I was more interested in stocks and trading and investing. I kind of got taken under the wing of the wrong people (retail brokers) and then got way too good at selling – it was like a ten year layover in a really horrible airport. But then I caught a plane out of there, dropped my Series 7 and converted my best clients to fee-based – which is a great deal for them obviously, compared to paying 2.5% on every buy and sell.
What’s the book about?
The book is the parallel stories of my journey and the history of Main Street – Wall Street relations, I tell the true story of how it came to be that everyone is “in the market” to some extent. I hold nothing back about the marketing and sales process going on behind the scenes.
Who should read the book?
I think Wall Street pros, kids in school looking to work on The Street and investors at every level. They’re going to love it.
Why should they read it?
This is a book that could never have been written and so never has been – until I came along. No one is revealing this stuff, most people have too much of a vested interest in the mirage. I come out and rip that curtain away. Plus, I’ll make you laugh while you shake your head.
Investors looking for a financial advisor or someone to help them manage their investments have many choices today. How can readers find a good financial advisor that they can trust?
Easier said than done I suppose.
You are now 35. You’ve been in the investment industry for 12 years. What’s the most important thing you have learned about investing?
The truth is that markets typically go up. Three out of four years are up years, and 20-50% drops should almost always be bought. But you can’t buy them if you’re fully invested, so investors need to learn to modulate their exposure up and down, not get in or out of the market completely.
Any other tips for becoming a better investor?
Read the blogs, skip the circus performers who pick hundreds of stocks a week.
What advice do you have for someone in college who aspires to be a financial adviser?
Pedigree is more important than almost anything else – get into a big firm, eat their cooking and raise big money. The easy way. Then, when you can’t take the place any longer, go out on your own.
Thank you for your time, Josh.
You can find Joshua Brown’s new book, Backstage Wall Street on Amazon.
Photo by: John Frattasi