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Life and Times of an itinerant slacker in Sacramento. Thrills, Spills Galore coming soon. Not to mention lots of opinions.

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Thursday, November 15, 2007

When Financial Industrial Complex and the American Dream Collide

I watched a football game last Sunday. I noticed a repeated theme in the commercials from the Financial Industrial Complex, formerly known as the insurance and brokerage industries. What I heard seemed striking when compared to the insurance industry that employed me in the 1980s.

The Financial Industrial Complex of late identifies itself as a resource for “wealth management”.

In an article about U. S. wealth and income statistics , I found this interesting story:

“If you're not parked near the top of the ramp, you're of little or no interest to financial services firms and financial advisers. There's no money to be made at these levels. Last year, a handful of Wall Street firms told their brokers they would no longer receive commissions on accounts holding less than $50,000. This effectively tells people with nano-Numbers to get lost. But for the Wall Street firms, there's gold on the floors above. The greater the household assets, the more fees and transaction costs can be extracted from an account. The result is a flood of advertising that captures a lifestyle so gloriously affluent it's enough to make everybody feel poor.”

This is a major change in these industries from their founding values (at least those values presented through their Public Image machinery) which pretty much stayed in place from the late 19th through late in the 20th centuries.

Financial services are promoted by telling a “corporate story”, rather than playing up specific benefits of the contracts and services available. This indirect approach is driven by State and Federal laws which restrict the ability to promote investment or insurance contracts on radio or television. The advertisements present a very broad story, limited to (1) customer identification, (2) identifying the sponsoring Financial Services Firm, and (3) an extremely vague notion of the benefits the customer can anticipate by giving money to the Firm.

The 20th century story was (1) the customer is the American family. The narratives often followed a “journey through life” story, following a WASP family from cash strapped starter house life with babies through comfortable retirement surrounded by adoring grandchildren; (2) the advertisement usually characterized the sponsor as the friend and protector of the young family whose hands are firmly placed in the bootstraps by which they will pull themselves up; and (3) if the young couple behaves like good WASPs, and associates with the firm, they will be rewarded with a satisfying and abundant life.

Well, as we moved into the 21st century, the story has changed. (1) the customer is already sitting on a pile of money, which we politely call wealth; (2) the Financial Services Firm is a very powerful and impersonal corporate edifice, large and powerful beyond description; and (3) if you bring the Financial Services Firm into your life, the pile will get bigger and bigger.

Just another way of saying, “if you are not already rich, we don’t need you”. Besides, the middle class is totally so tiresome.

That’s my story and I’m sticking to it.

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