Free lunch

We were discussing yesterday how 1 in 10 of our new accounts come in with portfolios holding literally 100s of positions. Mind you, this is not a family office with $150 million dollars, but rather a portfolio 1% of that size. There is no rational reason for these sorts of assemblages to be holding 100+ positions.
How do these happen? Simple: A broker gets invited to lunch by some wholesaler, where they hear a presentation about some new or old product/fund/private. They get back to the office, see what cash is lying around, and proceed to sell this turd to every client in their book. Over the course of 5 or so years, with a “free lunch” once or twice a month, you get portfolios like these. For the cost of rubber chicken, plus a 5% commission, the customer is sold down the river.

source: ritholtz.com