The Herd Mentality of Wall Street [Advice or Avarice?]

Posted on June 16, 2008 by Dr. David Edward Marcinko MBA MEd CMP™

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Understanding the Channel-of-Distribution Follies

By Dr. David Edward Marcinko; MBA, CMP™

[Publisher-in-Chief]

Former Investment Advisor and Reformed Certified Financial Planner™dem23

As a former surgeon, insurance agent, physician-executive who took an honest run at Wall Street’s PPMC infamy in the late 90s; a board certified financial advisor and stock-broker; and current writer, editor, publisher and speaker-consultant on health economic topics – I am not your typical citizen journalist or blogger. Although, I am the founding editor-in-chief of a successful peer-reviewed 1,200 page, quarterly print journal, our companion on-ground publication

For example, I’m not crusty; honest! I don’t often wear – but do have – a fedora, and only occasionally look like I just slouched out of Ben Hecht’s circa,1928 play, “The Font Page.”  I prefer stubble to a shave, and ooze skepticism. OK; call it cynicism, if you will. I do however, reckon myself a professional and independent journalist; as well as one heck-of-a-health economist, personal financial consultant and certified “doubting Thomas.”

Independent Means Un-Bossed and Un-Bowed

Yet, I don’t belong to the American Medical Association [AMA], the Financial Planning Association [FPA] or the American Management Association [AMA]. Actually, I’m not really a team player at all; although my wife does call me one who is “carefully selective”. She is aware of the few teams I’ve successfully played for in my career.

And, I am not afraid to write about the financial services industry; in print or online [see The Financial Services Industry Explained].

Link: https://healthcarefinancials.wordpress.com/2007/11/28/the-financial-services-industry

The Implosion

And so, it is with much repetitive irony that I watch supposedly independent and credible Wall Street firms stagger from one mistake to another, every few years, goading their retail financial advisors to promote – dare I say it – “push” – one flimsy financial product or strategy [CDOs and sub-prime home mortgages] that doesn’t work anymore for the sake of lucre.

And then, the same firm’s clean-house after imploding like they have recently done, by rounding up folks to blame, and firing them for having a herd-mentality.

Shame on them; their advisors [really non-fiduciary brokers and salesmen], naïve clients; and especially the clients that are medical colleagues. Shit-aki, mushrooms for brains; all!

This time however, it was the well known CEO heads that were lopped off. To use a financial medical-metaphor, these guys were “de-capitated”:

  • Merrill Lynch = Stan O’Neal
  • Citigroup = Charles Prince
  • UBS =   Peter Wuffli and Marcel Ospel
  • Wachovia = Ken Thompson
  • AIG = Maurice “Hank” Greenberg
  • Bear Stearns = James Cayne 

Of course, I wrote, called and tried to contact several of these “star CEOs” several years ago, to no avail. For a while, I was probably even on their secretarial email radar and telephone block lists.   

Mary’s Lamb to Slaughter

Now, one must wonder if/when the CEO slaughter of Kerry Killinger at WaMu will follow-much like Mary’s little lamb? So far, it hasn’t completely; but he has been stripped of his role as Chairman of the Board.

Remember, Executive Post readers, it was Kerry who oversaw the star-crossed folly into the sub-prime credit-lending fiasco that haunts us all. But, rest assured, I won’t try to contact him. He is very busy at the moment.

Reputations Lost?

So, will these Wall Street firms lose their pristine reputations as kings-of-the-universe? Nope, not a chance! Some pundits even say that in 2-3 years, the public will have forgotten the shenanigans of these guys and their investment banks and wire-houses [broker-dealers]. It’s called the science of “reputational-risk-management” and these firms coldly calculate it into their business plans.

Just Say No

I say, don’t let them. I say, never-forget. I say, ask for and demand a fiduciary financial advisor next time. It wont’ indemnify you from all financial mischief, of course, but it’ll be a good start. Use an independent registered financial advisor and dis-intermediate the broker-salesmen.

http://www.CertifiedMedicalPlanner.org

Or, don’t be surprised when, not if, something similar happens again.

Assessment

To see how staggering the recent write-downs and credit-loses some firms have written-off, per wholesale banking employee [non-retail brokerage or private client wealth management staff],

Just visit this website: www.HereIsTheCity.com

The site’s findings are amazing.

Full Disclosure

I was a “financial advisor” for SunAmerica/AIG more than a decade ago. I saw the industry “inside-out” with developing problems; back then.

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Speaker: If you need a moderator or speaker for an upcoming event, Dr. David E. Marcinko; MBA – Publisher-in-Chief of the Medical Executive-Post – is available for seminar or speaking engagements. Contact: MarcinkoAdvisors@msn.com

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Selecting Tax-Return Preparers

Posted on June 16, 2008 by Dr. David Edward Marcinko MBA MEd CMP™

What Doctors Need to Know about Preparers

Staff Writers

Most doctors and medical professionals are not thinking about tax season right now. But, according to Executive-Post supporter Rachel Pentin-Maki; RN, MHA “now may be the best time to rethink your relationship with your tax-preparer.”

All Tax Preparer’s not equal!

All tax return preparers are not the same. They possess varying levels of expertise and hold different credentials. If you are thinking about hiring a new tax preparer to do your 2008 return next year, you may want to begin your search soon so you have sufficient time to investigate and evaluate your options.

Specialty Needs

If you are aware of any significant tax issues when doing your return, find out if he or she has expertise in this area. For example, a recently divorced single father will want a tax return preparer that is knowledgeable about the tax ramifications of divorce and how it affects his return. Similarly, if you’ve recently sold a rental property at a loss, you’ll want a preparer who can advise you on reporting that loss.

Of course, medical specificity is paramount. An accountant who has many doctor-clients is a good start, but does he/she really know anything about activity based medical cost accounting?

Experience Counts

It’s usually wise to select a preparer who has been in the tax business for at least several years. However, should you opt to go with a less experienced preparer, be sure that individual has access to more experienced professionals who can address any complex tax issues that may arise during the preparation of your tax-return?

Types and Stripes

The complexity of your return, and not necessarily the amount of your income, should guide you in selecting a tax preparer, and resulting professional fees. Essentially, there are five types of preparers:

Certified Public Accountants (CPAs)—

These accountants have passed a rigorous examination which includes an entire section on tax issues. Many specialize in taxes and are experienced in handling complicated tax issues. In addition, if they are members of the American Institute of CPAs [AICPA], they must meet stringent continuing education requirements to maintain their memberships.

Commercial Agents—

These individuals work for large national organizations. They usually work only during tax season and have been trained by the organization. Most are form-driven. They are not, however, required to have a minimum level of education, nor have they passed an exam administered by a regulatory body.

Enrolled Agents—

These tax return preparers must pass a two-day examination given by the Internal Revenue Service or meet an lRS experience requirement. In addition, members of the National Association of Enrolled Agents or its state chapters must take at least 30 hours of class work in tax matters each year.

Public Accountants—

Many public accountants are tax advisers. These individuals have not taken the exams and are not obligated to meet the experience requirements of CPAs. In some states, public accountants must be licensed, but in others, anyone can claim the title.

Tax attorneys—

Like CPAs, tax attorneys must meet continuing education requirements and are subject to regulations by the states where they practice. Most tax attorneys don’t specialize in tax return preparation. Instead, they tend to be more involved in tax planning and tax litigation.

Fees

Some tax return preparers work for a fixed fee while others charge hourly rates. In either case, be sure to clarify in advance how much or on what basis the preparer will charge you to do your return. Keep in mind that it’s up to you to provide the preparer with the information necessary to do your return. Unorganized or missing files and receipts are likely to result in more work for the preparer and higher costs for you.

Assessment

Keep in mind, too, that only enrolled agents, CPAs, and tax attorneys are authorized to practice before the IRS. This means that they can represent you throughout the entire IRS audit process; commercial agents and public accountants may not.

Conclusion

What has been your experience with the above accounting types? Is medical specificity really required? Please comment, opine and send us your “tax preparer war-stories.”

Related Information Sources:

Practice Management: http://www.springerpub.com/prod.aspx?prod_id=23759

Physician Financial Planning: http://www.jbpub.com/catalog/0763745790

Medical Risk Management: http://www.jbpub.com/catalog/9780763733421

Healthcare Organizations: www.HealthcareFinancials.com

Health Administration Terms: www.HealthDictionarySeries.com

Physician Advisors: www.CertifiedMedicalPlanner.com

Speaker: If you need a moderator or speaker for an upcoming event, Dr. David E. Marcinko; MBA – Publisher-in-Chief of the Executive-Post – is available for seminar or speaking engagements. Contact: MarcinkoAdvisors@msn.com  or Bio: www.stpub.com/pubs/authors/MARCINKO.htm

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