Meet investors’ No. 1 money watchdog

BOSTON (MarketWatch) � Did you think Wall Street�s giants were charitable organizations? Did you think multi-billion dollar profits were made in ways that were entirely in your best interests?

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If you did, then the sharpies at Goldman Sachs Group GS �were being polite to label you a �muppet� � a derisive term for Goldman clients, according to a former executive of the firm. Read Greg Smith�s resignation letter here.

In fact, you�re a sucker.

While the financial-services industry is busy controlling damage from Smith�s public statements about how Wall Street (and Goldman Sachs in particular) seems to have lost its moral and ethical compass, individual investors seem to have lost sight of Smith�s message: The only person you can be sure has your best interests at heart is you. Read more: Don�t be Wall Street�s �muppet.�

Who�s in your wallet?

Smith�s detractors have said he wasn�t high enough up the ladder for his statement to have real meaning. They want you to believe he�s an idiot because he spent 12 years in the financial services business before figuring out that Goldman was making its massive profits by getting a little something from a lot of little guys.

His admirers, meanwhile, say his words are a call to action for reform of the financial-services industry and more.

Let them hash it out. While they�re at it, worry about your own money, and how it�s being handled.

Whether you work with a broker, financial planner, investment firm or anyone else selling you financial services, you should always understand that they make their money first, and you make yours second � if at all.

Even with low-cost index funds, when the market goes down, the fund�s sponsor still collects. Even a financial adviser on a fee-only basis gets a percentage of your assets under management in good times and bad.

And if you pay a commission, even if it is the best investment recommendation ever, the person who gave you the tip gets paid first, before you make a penny.

Of course, there are people in financial-services who act in the best interests of their clients. Sometimes that is required by law, sometimes it is simply how they do business, but consumers need to enter every financial relationship with the idea that trust is earned, not bought.

Trust and verify

That�s why it�s important to know yourself.

There�s nothing wrong with turning to a financial counselor for help managing your money, deciding on insurance coverage and more. If you don�t have the skills to look out for your money, then turn to someone who can sort through the options and find solid choices. But you first need to know what you want.