Where Are All the Customers’ Yachts? A Timeless Reminder for Advisors and Investors

“Where Are All the Customers’ Yachts?” is one of those rare books that remains as relevant today as when Fred Schwed Jr. penned it in 1940. The title alone is a masterpiece of dry wit, skewering an entire industry in just six words. For me, it’s more than a clever jab; it’s a book that shaped the direction of my career.

It was mandatory reading during my time in a Dimensional Fund Advisors (DFA) book club, where its lessons sparked critical conversations about transparency and client-first practices. Nearly a century later, Schwed’s observations about Wall Street’s priorities are as sharp and stinging as ever.

Why "Where Are All the Customers’ Yachts?" Still Resonates with Investors Today

Schwed’s premise is painfully simple: Wall Street has an uncanny knack for enriching everyone except the customer. The gleaming towers, the sharp suits, the “cutting-edge” strategies, all of it masks a system designed to look sophisticated while quietly siphoning wealth from clients.

Take a question I hear all the time: “What are your returns like?” or “What should I be investing in now?” Decades of financial marketing have drilled this idea into people’s heads that an advisor’s value lies in delivering market-beating returns. But here’s the truth: if someone could reliably beat the market, they’d be on an island somewhere managing their own money, not charging fees to manage yours.

It’s not a glamorous answer, but it’s the honest one. It’s a discussion I’ve had with my dad more times than I can count. We’ve joked that no advisor gets rich because they’ve discovered some secret formula to make their clients ultra-wealthy. Advisors get rich by taking a percentage of their clients’ assets or charging commissions. Clients build their wealth through their own skills, labor, and entrepreneurship. Advisors can enhance that wealth, but they don’t create it out of thin air.

And yet, Schwed’s critique of “yachts for advisors, canoes for clients” rings true because the industry still rewards complexity over clarity and hype over humility.

A Real-Life Example of Portfolio Complexity Gone Wrong

One client came to me with a portfolio that could only be described as a Rube Goldberg machine of investments. Dozens of mutual funds, individual stocks, ETFs—each chosen by a previous advisor to look impressive. The complexity gave the illusion of value, as if the sheer number of moving parts meant it was finely tuned for success.

But in reality, it was an expensive mess. Duplicative, tax-inefficient, and riddled with unnecessary fees. This isn’t uncommon. Complexity is often mistaken for expertise, and Wall Street is more than happy to play along, selling products that look sophisticated but ultimately fail to outperform a well thought out, cost conscious, evidence-based portfolio.

Why Investors Fall for Speculation: A Lesson from Schwed

“There are certain things that cannot be adequately explained to a virgin either by words or pictures. Nor can any description or model convey to the innocent the perverse kind of pleasure that can be derived from losing money.”

It’s a perfect summary of human behavior. Whether it’s tulip bulbs in the 1600s or meme coins in 2025, people love chasing speculative returns. And the industry? Always ready to sell the experience, no guarantees included.

Schwed’s wit is a sharp reminder of why empathy is key in advising, and why helping clients avoid the speculation trap matters as much as the advice itself.

What Samuelson and Ross Teach Us About Active Management

Paul Samuelson once quipped, “It’s not easy to get rich in Las Vegas, at Churchill Downs, or at your local Merrill Lynch office.” His point? Beating the market isn’t a strategy, it’s a gamble. Similarly, Dr. Ron Ross called out Wall Street’s favorite trick: “pretending luck is skill.”

Here’s the issue at hand: active managers might occasionally win, but it’s usually due to randomness, not repeatable skill. It’s like a coin-flipping contest. If you put 1,000 people in a room and ask them to flip a coin, a handful will get 10 heads in a row. Are they geniuses? No. They’re just the lucky ones. And yet, the industry is built on celebrating these outliers, until the next downturn reveals they weren’t magicians, just participants in a game of chance.

The Irony of Wall Street’s Wealth

The title anecdote, where a visitor to Wall Street sees rows of brokers’ yachts and innocently asks about the customers’ yachts, is Schwed’s mic-drop moment. It’s a reminder of who truly benefits from “beating the market.” Spoiler: It’s not the people paying high fees.

What’s striking is how little has changed. Today, we’ve traded yachts for private jets and loaded mutual funds for complex derivatives, but the dynamic remains: complexity often masquerades as expertise. Schwed doesn’t just critique this, he invites us to recognize the irony and demand better.

How Advisors and Investors Can Learn From This Wisdom

The book isn’t just satire, it’s a gut check. For advisors, it’s a reminder that complexity often disguises mediocrity, and that real value comes from trust, transparency, and helping clients focus on what they can control. For investors, it’s a lens through which to see the financial industry more clearly and skeptically.

It’s also a personal reminder: the best advice is rarely flashy. It’s grounded, honest, and often a little boring. Which, in investing, is usually a good thing.

Nearly a century later, Where Are All the Customers’ Yachts? holds up as more than entertainment. It’s a moral checkpoint. Advisors should read it as a litmus test for integrity; clients should read it to sharpen their BS detectors.

As Schwed wrote:

“The investor has been led to believe that it is a simple matter to select stocks that will double their price in a short time. Such investors are certain to lose their money, perhaps all of it. This is just as well. It will keep them out of more serious trouble.”

For me, this isn’t just a critique of Wall Street and the financial services industry, it’s a blueprint for doing better. Transparent and client-first always.

About the Author

Carson McLean, CFP®, is the founder of Altruist Wealth Management, leveraging over 15 years of industry expertise to provide transparent, flat-fee financial advice. Inspired by timeless works like Where Are All the Customers’ Yachts? by Fred Schwed Jr. (available here), Carson is committed to challenging outdated industry practices and helping clients achieve their financial goals with integrity and evidence-based strategies.

Disclaimer: This content is for informational purposes only and is not intended as personalized financial, tax, or investment advice. While we strive to provide accurate and up-to-date information, all investments carry risk, and past performance is not indicative of future results. Any strategies or insights discussed may not be suitable for your specific situation. If you’d like to discuss how this applies to your financial plan, feel free to reach out.