MARMAC

If after I became a broker, any of my clients had ever asked me—and thankfully no one ever did—what I had done for a living before I went to work for Merrill Lynch, I would have told them the truth: Before becoming a broker, I worked as a waitress at the Buttercup Bakery in Berkeley, California. My dream was not to become a broker, but to open a hot tub and sauna place, with a restaurant and haircutting salon built right in: one-stop shopping if you happened to want a meal, a haircut, and a sauna. I would go on and on about this dream to my regular customers, and finally one day a man named Fred Has- brook gave me a check for $2,000 with a letter that read, “For people like you to have your dreams come true. To be paid back if you can at 0 percent interest in ten years.” I was stunned, and even more stunned as word got around and others of my regulars chipped in, too. Believe it or not, I soon had a $50,000 nest egg with which to start my business.
At the suggestion of one of my benefactors, I put the money
into an account at Merrill Lynch and was assigned to a broker,
a sweet guy whom I’ll call Rick. I told him I wanted to keep my
money safe, and he had me sign some papers that I didn’t even
read. Off I went, to have blueprints for my business drawn up.
I still have those blueprints.
To make a long story short, that sweet Rick—knowing that the money wasn’t mine, knowing that I wanted above all to keep it safe, and knowing that it was being held there so I could open my business—had me investing in these things called options on oil stocks, the most wildly risky and speculative investments I could have been in. I felt funny about this from the beginning, but I didn’t know enough, or trust myself enough, to understand why or say no to Rick’s grand schemes. In the end, I agreed because I trusted Rick. With his nice office and pin-striped suits, he was the closest I’d ever been to Wall Street or big money. At first we were doing pretty great. In those early weeks we were up $5,000. I couldn’t believe it! I had never made so much money without even trying, so I became totally intrigued with this new way to make money and thought that I had better study up on this great new moneymaking discovery.
This was in 1979, before anyone had computers at home, and I was trying to figure out about these options from reading the newspapers every day. I had stock quotes and options quotes pasted up all over my bedroom walls, trying to make sense of them. Finally I began to get the hang of it and understand what we were doing—and how what we were doing was very, very wrong for me. My understanding came too late, I’m afraid. The reversal of oil stocks happened quicker than you could say sauna and hot tub, and I lost it all, all the money I had put in and all the money I had made. Everything. My financial “adviser” had done me in, not to mention what he had done to all those people who had tried to help me.
It took me a long time to get a true understanding of what it takes to handle other people’s money. It is not like Monopoly, when after you’ve finished playing the game you simply take the houses off Park Place, pack up the money that comes with the game, and go on with your day. So much more is at stake.
Rick may have been my broker, and a reckless if not unscrupulous one at that, but I couldn’t have been luckier that he was at least with a reputable and nationally recognized firm like Merrill Lynch. Merrill came through in the long run and covered the losses in the account, after I demonstrated that he had misled me about the risks inherent in what we were doing, o in the end I was able to pay back all the money to my investors. I had picked the right firm, at least, if not the right broker at the firm—and both decisions are extremely important if you decide to go with a full-service brokerage firm.
Soon afterward, I joined Merrill Lynch.
Why would Merrill Lynch hire a waitress? They weren’t hiring a waitress. What they saw in me was that I would be an excellent saleswoman, and they were right.
At major brokerage firms, the brokers or financial advisers (which is what I became at Merrill Lynch) are mainly commission-based advisers who do not usually come up with the ideas of what you should buy or sell. Most of them take the recommendations of the financial analysts who work for the firm. Your adviser takes these recommendations, checks to see whether they’re suited to your needs and financial situation, and tries to sell these investments to you if they (and you) meet those criteria.
My story about Rick isn’t meant to frighten you out of asking the help of an adviser, if you feel that’s the way to go. Nor is it meant to suggest that all advisers are disreputable, because most do have your best interests at heart and, if the firm itself is reputable and you yourself trust the adviser, you will almost certainly be safe. By turning your money over to someone else, however, you must not give up feeling responsible for it, as I did when I signed those papers. The ultimate responsibility for your money must always remain in your own hands.