The Alexandria Experience

Lately a lot has been on the media concerning investment advisors and financial advisors. Private bankers and different banking brokerages have been presented as impostors, the advisors as frauds and the advices themselves as completely inappropriate. Especially old people have been reported to suffered from poor investment advices, where the financial instruments are sold for profit, not for them being the most appropriate for the people seeking for advice in savings and investments. The costs, terms and conditions and the risks haven't been fully understoord By the clients who these products and instruments were sold to.

As an employee in a bank and a keen follower of economics and financial markets, I consider that savings, investments and wealth are important to all of us and the information from these should be emphasized more on the media. Unfortunately, only the negative sides of financial consultation are commonly presented in the media. These kinds of hoaxes create even less interest towards investing among the common people. I wanted to see what the whole fuss of inappropriate investment advices was all about. I don't want that bad investment advisors ruin the reputation of reliable advices on one's own savings and investments.

I decided to set up a meeting undercover to one of these brokerages presented in the media, Alexandria. Undercover by meaning not telling that I currently work in a bank and that I'm currently in my 4th year studying economics. I wanted to see what kind of advices and recommendations these companies would give to the average-joe. I filled up the pre-information forms to be according to my new identity: Someone who hasn't got a clue even what a stock is.

I started by converting myself from the typical business school-student to somewhat more of the common man. The common man who looks like he is not possessing much information concerning the financial markets or investments and has no experience or expertise from the area.

On the day before the meeting, a young gentleman kindly called me and asked if I wanted a cup of tea or coffee during the meeting that was scheduled to me on the next day. What a peculiar way of sending a reminder for the meeting, I thought in my head. Also I was feeling a bit sick of the cheesynes of this kind of contact since after all, I know what I was expecting from the meeting. I was expecting myself to be bamboozled.

When I entered the negotiation room, I first noticed the simple greyscale that was controlling the room. Black and white paintings of sail boats on a grey wall behind a grey desk created the atmosphere of something to be created in this room. It was brilliant. The room was decorated clearly and closely to create this kind of feeling for the client.

The advisor who kindly offered me a cup of coffee with chocolate was older than me and looked very experienced. Right from the first moment I sensed that his presence was intented to low my self-esteem and create new division of power for the situation. Everything that he would say would be the truth and I should be quiet and accept his message at any cost.

We started the conversation by him asking about why I was there, what I do for my living etc. I said that I'm interested in invest some of my funds from my current account to some more profitable investments and that I would be interested to hear what Alexandria has to offer. I said that I've been working as a mason for a year or so.

Suddenly the advisor calmed, looked me straight into the eyes and dropped a bomb to the room by asking: "Are you really telling the truth?"

Huge letters saying GAME OVER came straight into my eyes. He had done his homework. He had googled me, checked my LinkedIn-profile and read my blog posts before the meeting. The fraud knew that I'm the fraud and that I work in a bank. Everything that I told him was complete bullshit.

He started to ask questions of my true agenda. Why did I really arrive? Did my employer send me to the meeting for corporate espionage or something?

By caughting me red-handed I was forced to reveal my true agenda of pretending to be someone else just to be fooled by him. I told my plans of revealing in this blog that how I would be fooled to invest in non-profitable, expensive and inappropriate instruments.

Source: Alexandria (http://www.alexandria.fi/alexandria-menestyi-erinomaisesti-yksityispankkien-vertailussa)

After that the advisor started presenting me indicators presenting customer satisfaction and pointed out that even well-known banks have gotten themselves into similiar trouble as Alexandria. Also a good point was that the soon arriving MiFid II-directive would regulate their business even more than before and their business was already (propably because of the media attention) well regulated. Only certain amounts of certain instruments can be sold to people and a certain amount of capital would be required to certain instruments in order to prevent the hoaxes presented in the media. MiFid II -directive is aimed to stop these kinds of hoaxes by more regulation and they were well aware of it.

He was well aware of the hoaxes and told that no such cases from individual employees have never been found in the firms' archives. Fair enough.

I friend of mine told me that people to be hired in these kinds firms are people who have no experience from the financial markets or a relevant university education. This is why they easily believe in their own jargon and can be so convincing in selling these awful instruments with 3,3 % management fees for people. On the other hand it would be unfair to make sudden conclusions and generalizations from this. These people still have to complete the APV1-degree in order to be qualified for the job. That means that they still have know something alright.

It was a shame that I didn't get to see the process or my recommendation that would give them the highest fees. I was adviced to try my luck on another local brokerage that is really bad according to them. Propably because my potential blog would hurt the competitor more than them? I don't know.

Two lessons I learnt: First of all, you cannot judge the brokerage without going there and asking for advice. You can only tell if its bad by having some knowledge of investing before going to the meeting. Then you can make your own conclusions on the potential of the instruments recommended for you. I'm not saying that Alexandria is a bad company for everyone, I say it is not a company for me.

Secondly with as strong social media presence that I possess, it is possible to be anonymous. I still wonder why on earth did they decide to google their customer and watch their LinkedIn-profile. Have similiar frauds been there before? Do they need to be careful now when they have a bad reputation? Even a day after the meeting I noticed that several employees of Alexandria have been stalking my profile after the meeting and I'm certain that you are reading this.

Anywho, I didn't achieve what I planned but I managed a get a thing crossed out from my bucket list: Being a con artist and pretenting to be someone else for a day. My mistake was to introduce myself with my real name. Booking up meetings with a fake name on the other hand is nowadays almost impossible.

For my readers there in Alexandria, I did this only for myself and for my readers, not for my organisation. Thanks for having me still and thanks for the coffee. It was propably one of the best coffees I've had in my life, although it came in the expense for me losing my face.

Text SW

Does Ethical Business Exist?

In the current society where all the consumers are very green in terms of values and very aware of the current state of the world. This emphasizes the importance of big corporations ans even smaller firms to be more transparent and responsible in their operations. Thus responsible business has become on of the most important things in doing business in these modern times and corporations just cannot pollute the whole Gulf of Mexico without some serious consequences am I right?

Many arguments are for and against responsible business. By being responsible, the corporations wouldn't run their operations in ways that would endanger the environment, for instance. Also by being green the corporations would also create competitiveness of the firms who are seen as less ethical by potential consumers.

On the other hand, doing business ethically and responsibly comes with a cost. Firms must pace resources to ethical and responsible business continuously and this can be against the basic idea of a firm; to create maximum amount of wealth for the shareholders. A new program or marketing designed to be environmentally friendly, can be shown as a reduction of dividends, for instance. This can create unsatisfied shareholders that would like to take their investments out of the firm.

In my personal opinion corporations should be ethical and show responsible behavior in their business. But the big question is that can they be and will it matter? Will it matter in our world filled with greed and capitalism? Can you be ethical when after all, your actions themselves still are unethical?

The market system is inherently unethical. The law of supply and demand is in the heart of economics. Still, it is based on the willingness of consumers to buy the product and the suppliers to supply the product in a given price. The price mechanism doesn't necessarily present the real value of the product. It is only based on the mechanism of creating the most welfare in the economy (and maximum profits for the firm). Demand and supply aren't ethically driven.

Business is based on self-interest. Exchange will happen with a motivation for a benefit. Business is based on creating profits or a win-loss situation of the maximum kind. In theory, other man's win is an other's loss. Making profits out of someone's losses, well, that sounds unethical.

A good example comes from my dear world of banking. Back in the ancient times, Aristotle argued that interest is unnatural, since money, as a sterile element, cannot naturally reproduce itself. That's why taking on the interest on the money that you loan to someone else is unethical. You are not going to loan the money on your good will: You are doing it to get a benefit in the form of interest. The whole business idea of banks and the financial sector bases highly on taking interest and commissions on loans and financial transactions. The stock-broker trades stocks that lead to profit for the broker. The investment advisers advice you to buy the products on which they get the most profit. The two latter of these have gotten us into much trouble before.

The unethical nature of the world economy is also one causation of the business cycle with its booms and recessions. When a mass of economic agents are buying or selling products purely for the sake of making profits without considering the current economic conditions will inevitably lead to inflation and bubble economies.

So where this has gotten us?

It is still important businesses to be ethical and responsible in their actions, but people aiming their accusations on these firms on obtaining profits should aim their focus on the whole society and human nature itself. Although the truth is that we are probably a bit crazy of creating ourselves this kind of an unethical system.

But that's the way the world works. I'll say we abandon our political argumentation and our accusations of big corporations if we don't focus more on the philosophy behind our system when taking stands for or against ethical business. No matter how ethical a business tries to be, inherently business of any kind is unethical.

Text: SW
Pictured don't belong to me