I picked up one (as usual) brilliantly funny article from the mysterious Epicurian Dealmaker the other day which linked through to a rather depressing article about how the business of giving financial advice is hopelessly corrupt. The article was saying that financial advisors are always biased because they tell their clients what they want to hear.
And sure that’s all true, there is a lot more money to be had if a project goes ahead and you get the follow-on, than if it stalls because you pointed out that it didn’t make sense and the managers who were promoting it had somehow lost touch with reality. And if the project will take three-five-ten years to go sour…who cares?
If a project goes ahead and money is made, well you can try for a percentage, but if you save someone $100 million by persuading him not to do something, (a) how does anyone know that it wouldn’t have worked and (b) how do you work out the percentage?
I’ve spent twenty years off-and-on doing valuations, due diligence, financial projections etc…as a third party advisor; and sure it’s a lousy job. It’s not like work you seek out particularly, more like something you do when you can’t find anything better to do.
Generally the only people who make decent money in that line are the whores; I worked for them all, Arthur Andersen, every one of the Big 4, rating agencies, investment banks…putting together the story-line for big-name investors with claims to be “the richest in some little or big puddle”, corporations, governments….etc. And if you play it right they call you the “rainmaker” or the “story-teller”, and every project needs one of those.
But you have to remember that it’s up to the “King who hath no clothes” to decide who he hires, and who he listens to.
There’s a book I like which was written by a long-gone Scotsman who had a something to do with the fact that the Abu Dhabi Investment Authority has $300 billion stashed away (if you listen to RGE, or $800 billion if you listen to the FT), compared to places like Nigeria, who had just as much revenue over time but pissed it away.
It’s called the “Uncivil Servant”, who was the “old-school” Indian Civil Service,…
