Wall Street is about as popular in adult circles as a soggy mound of uneaten broccoli on a five-year-old’s dinner plate. In their new book, What They Do With Your Money: How the Financial System Fails Us and How to Fix It, authors Stephen David, Jon Lukomnik, and David Pitt-Watson not only illustrate the inequities in current financial markets, but also give individual investors practical advice.

“We are probing the inner workings of Wall Street. The system as it operates is flawed,” Davis said.

Davis and Lukomnik will be speaking at R.J. Julia in Madison on Thursday, May 19 and at Congregation Beth Shalom Rodfe Zedek in Chester on Sunday, May 22.

The mere mention of the words “Wall Street,” Lukomni maintains, inspires a sense of “free-floating rage,” even as people understand the importance of the financial system.

“Bernie got the rage right,” he adds, referring to the animating principle of presidential candidate Bernie Sanders’s campaign, “but he doesn’t have the solution.”

Lukomnik thinks he and his co-authors of What They Do With Your Money have a far better answer for the problem: awareness.

“We don’t want to engender anger. We want to engender awareness. Free floating anger doesn’t help anything,” he said.

The authors believe investors need to understand a variety of issues including where mutual funds invest money, how mutual fund advisors are paid, and how their funds are invested.

Paying a fund manager 1.5- or two percent of earnings a year doesn’t sound like much, but over a lifetime, Davis pointed out, that can eat up as much as half of an investor’s retirement funds. And, he noted, there is little correlation between the management cost and the fund’s performances. The mutual funds with the lowest charges perform just as well as the firms that charge the highest compensation rates.

In the Netherlands, where rates are far lower, an investor putting away the same amounts of money would end up with 50 percent more funds for retirement because of the far lower costs for the management of the money, Davis said.

Lukomnik noted that the two percent charge has remained unchanged over decades.

“All kinds of things have advanced. We have computers, we landed on the moon, cars are more efficient—everything is more efficient but finance. We are still paying that two percent while business in the financial sector has more than quadrupled.”

He pointed a finger at the ever-lengthening chain of middlemen involved in financial transactions as the culprit in rising costs.

Moreover, the amount managers charge clients is often expressed unclearly, using basis points rather than just providing the overall cost in a readily understood dollar amount or percentage. Clients looking at the basis points cannot easily comprehend what they are actually being charged.

“We should make fees explicit,” Lukomnik noted.

There are many other areas the authors identify as ripe for reform, from out-of-control CEO compensation to the kinds of companies mutual funds purchase. Investors often don’t know what stocks their money is buying and are unaware of whether their investments support businesses that exploit workers or pollute the environment. These are moral issues of critical significance, Davis said, but also, given the range of information now available on the Internet and social media, concerns that can materially affect the price of stocks.

Davis, a senior fellow in corporate governance at Harvard Law School, is a Madison resident. Lukomnik, executive director of the Investor Responsibility Research Center, divides his time between Madison and New York City. Pitt-Watson, who lives in England, is executive fellow of finance at the London Business School. The three co-authored an earlier book, The New Capitalists: How Citizens are Reshaping the Corporate Agenda.

Working together and working long distance was not a challenge. Each had responsibility for writing a section of the book, but, according to Davis, with suggestions and emendations, by the time they were finished it was hard to tell who had written each chapter.

“We hope it is seamless,” he said.

Lukomnik saw another advantage: “If you get stuck, if you have writer’s block, you can talk to one another.”

The authors also worked hard to make it a book understandable to laymen rather than to economists.

“We tried to purge the book of financial lingo,” Davis said.

The goal is not simply to have shareholders understand, but to encourage them to take a far more active role in pressing money managers and corporations for the kind of reforms of corporate governance that benefit the investing public.

Lukomnik recalled trying to explain to his then-young children what corporate governance involved. They understood that his wife, a pediatrician, helped sick children. Corporate governance was initially far harder to explain. Finally, he told the youngsters a bit about capitalism.

“Capitalism is the best system ever invented, but it can be made better,” he explained.

Now when his wife leaves for work in the morning, he always says, “Make the kids feel better,” and she replies, “Make capitalism safe for the world.”

Stephen Davis and Jon Lukomnik, authors of What They do With Your Money: How the Financial System Fails Us and How to Fix It

Thursday, May 19 at 7 p.m. at R.J. Julia, Madison. For more information, visit rjjulia.com.

Sunday, May 22 at 9:30 a.m., Congregation Beth Shalom Rodfe Zedek, 55 East Kings Highway, Chester. For more information, visit cbsrz.org.

Both events are free and open to the public