The Blatt Watch by Peter Blatt: The New Face of Bureaucracy

From the desk of Peter Blatt

March 13, 2013

We’re living in the renaissance of red tape. Everywhere we go, in everyone we speak to throughout our day, with every customer or vendor there are at least some mild bureaucratic hurdles to jump. From the local municipal boards to the highest chambers of the upper echelons of the American federal government, bureaucracy is a way of life. It’s a process, a certain mindset; it’s just the way things are done.

And that’s precisely the reason why I don’t think it works.

We see it every day at work, and every day, it creates undue hassles. Inevitably, many will disagree. Many of our fine veterans, for example (a group that my company supports) may argue that without strict bureaucracy and an ironclad chain of command, battlefield and strategic mission success is undermined, a belief that I won’t argue against. The military has an appropriate purpose for it.

But does that exception extend to brokerage houses? Well, you tell me. Does a required distribution of $0.06 make sense?

Yes, you read that correctly! One of our dear clients received a check in the full amount of an appalling $0.06. Six cents! He thought it was so ludicrous that he sent me a copy and allowed me to share it with you in this edition of the Blatt Watch. And that’s not all: if you look closely, you’ll see language stipulating that there’s a $25 fee levied against the client’s account if this six cent check is not cashed with 180 days.

Six Cent Check

It’s this kind of process-driven, profit-focused, all-the-sardines-can-fit-into-one-can mentality that reveals the Big Brokerage House’s true ambition: efficiency of scale at the expense of a tailored customer experience and care.

If Equity Trust doesn’t receive the coveted Lifetime Achievement Bureaucratic Endowment Award, then it’s only because they were beat out of the competitive running by another nominee, the United States Congress.
By Friday March 1st, our leaders from both sides of the aisle in Washington D.C. will need to come together to negotiate an amendment to the Budget Control Act of 2011, also known as “sequestration”. Ironically, to “sequester” literally means to “withhold”. Isn’t that a principle bureaucracies live by?

What the law is withholding is about $1 trillion in federal spending over ten years. The budget cuts will hit every facet of the government’s operations, from agriculture, to the Department of Education, to the military and defense programs. The only clear exemptions are entitlement spending.

Why are we once again finding our Congressional leaders in another deadline-ringing stand-off? Mostly because of ideology (Republicans and Democrats cannot agree on a balance between increasing taxes and cutting spending), but also because of, you guessed it,bureaucracy; it’s the rotting leftovers from the 111th and 112th US Congress’ negotiations on the debt-limit settlement of 2010.

So, I implore you: consider what kind of bureaucracy you can eliminate from your life. In what ways can you simplify your investment portfolio? Would having the direct number to a financial advisor you can trust help you restore faith in your personal finance decisions? If a $0.06 check sounds like an insane waste of paper, money, and time, maybe it’s time to say “no more” to the Big Brokerage House.

If that’s the case, then please feel free to give me a call if you think there’s anything I can do for you.

Until next time,

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