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In my understanding from reading the investing habits of the politicians over the years, they just suck at it or aren't relevant to retail investors. One, they don't have the time because they are busy raising funds. Two, most are independently wealthy enough that they can have asset managers take care of it at obscene fees and not suffer for it. Three, some of them actually worry about conflicts of interest (ok, I can hear the snickering from readers) to be at arm's length.
Interestingly enough, there seems to be a significant difference in who manages assets for the wealthy between east coast and west coast. While GS, MS, etc may be in fashion for old money on the West Coast, almost all of my interactions with West Coast wealth (in raising angel funds and providing company financials and valuations for their records) has been via accounts managed by either Merrill Lynch or Charles Schwab advisors, none so far with the tradional investment banks. Many of them with independent financial advisors that use these platforms.
Just a follow up, vkt. Thanks for your post. It seems logical that west coast pols would use the two you named, since both Charles Schwab and Bank of America (who owns Merrill) are headquartered in San Francisco. And while Schwab does have an independent institutional arm where RIAs like me custody client dollars, the biggest part of Schwab is still the retail business. As for Merrill/BofA, there are no independents there, just rank upon rank of salespersons, who are continually pushed to bring in more and more business for the corporate's in-house products and services. In this respect, Merrill is certainly no better than GS, MS, and the other big wirehouses.
I’d be curious to know if Cruz, Rubio, Santorum, Clinton, and Sanders took advantage of the low-cost (as well as its opportunity for matching funds) federal Thrift Savings Plan as part of their investment strategies.
Just a follow up, vkt. Thanks for your post. It seems logical that west coast pols would use the two you named, since both Charles Schwab and Bank of America (who owns Merrill) are headquartered in San Francisco.
A popular misconception (vkt is right - PR spin can be pretty powerful). BofA "merged" with NationsBank (keeping NationsBank's CEO as CEO and Chairman) in 1998. For PR purposes, it retained the BofA moniker. Still headquartered in Charlotte, though.
Similar to SBC acquiring AT&T but keeping the AT&T name.
@bobc, in addition to what @msf has pointed out, the involvement with Merrill with most of these high net worth individuals predate the BofA merger. Neither BofA nor Merrill is seen as particularly west coast. I think it is historical going back to dot com era when Merrill may have approached the growing individual wealth here strategically earlier and more than the other traditional investment banks who were either more involved with corporate customers or their cut off net worth requirement was too high. Same thing with Schwab. These are seen as paying more attention to the high net worth individuals (say up to $100M) than the big NY three who are perceived to do so only for the ultra high net worth. At least that is the perception.
Also most of these arrangements work via personal references within the wealthy networks so family or qbroker doing well by their customers get more customers. It has been funny sometimes when you conclude an agreement with a wealthy individual and he/she passes it on to their advisor/custodian, it is the same guy you have dealt before in another completely different deal and working at Merrill or Schwab that calls you.
There is also another minor difference between the coasts I have noticed. There is a bit of prestige factor in the East Coast in having say Goldman Sachs as your financial institution, a sign that you have made it even amongst the wealthy. So, there is a pecking order between the banks. Not so much on the west coast where wealthy individuals will whip out their Fidelity cheque books as freely as pointing to their Schwab advisor.
But there is some of that even here especially at the lower levels of net worth who prefer First Republic for their banking needs and logos on their cheques and wouldn't be caught dead in the lobby of a BofA or Wells Fargo.
Some of the wealthier individuals have a full time financial advisor working exclusively for them to provide a layer of due diligence who then deals with the fund families or brokers. There it depends on who can cater to the multiple investment needs of these individuals.
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Look at it this way - now we know it's the Republicans who are paying Hillary's fees
Interestingly enough, there seems to be a significant difference in who manages assets for the wealthy between east coast and west coast. While GS, MS, etc may be in fashion for old money on the West Coast, almost all of my interactions with West Coast wealth (in raising angel funds and providing company financials and valuations for their records) has been via accounts managed by either Merrill Lynch or Charles Schwab advisors, none so far with the tradional investment banks. Many of them with independent financial advisors that use these platforms.
BofA "merged" with NationsBank (keeping NationsBank's CEO as CEO and Chairman) in 1998. For PR purposes, it retained the BofA moniker. Still headquartered in Charlotte, though.
Similar to SBC acquiring AT&T but keeping the AT&T name.
Also most of these arrangements work via personal references within the wealthy networks so family or qbroker doing well by their customers get more customers. It has been funny sometimes when you conclude an agreement with a wealthy individual and he/she passes it on to their advisor/custodian, it is the same guy you have dealt before in another completely different deal and working at Merrill or Schwab that calls you.
There is also another minor difference between the coasts I have noticed. There is a bit of prestige factor in the East Coast in having say Goldman Sachs as your financial institution, a sign that you have made it even amongst the wealthy. So, there is a pecking order between the banks. Not so much on the west coast where wealthy individuals will whip out their Fidelity cheque books as freely as pointing to their Schwab advisor.
But there is some of that even here especially at the lower levels of net worth who prefer First Republic for their banking needs and logos on their cheques and wouldn't be caught dead in the lobby of a BofA or Wells Fargo.
Some of the wealthier individuals have a full time financial advisor working exclusively for them to provide a layer of due diligence who then deals with the fund families or brokers. There it depends on who can cater to the multiple investment needs of these individuals.