Hey, Advisor, Are You a Sales Person?

 

What is the role of a financial advisor? How is it defined and who defines it? Of course the most important opinion belongs to the public, and the public's opinion of the financial services industry is derived from observing those who work within it.

After numerous years in the industry, I have made some observations as well. I believe that in a majority of cases the position of the financial advisor is primarily treated as a sales gig. In addition, I believe the American consumer is beginning to see this more and more. Although I do not have any third-party research to support this belief, I have had many discussions with clients who have confirmed that this is the case.

Years ago, I worked for a large brokerage firm. One of this firm’s 'top producers' was also a great salesman. He was not a gifted tactician, but he could spin a good yarn. However, behind the scenes—a view that clients unfortunately do not often possess—all he cared about was how much money he made. During the 1990s, this type of approach, however self-serving it may be, still yielded the client a decent return. Not so today.

Part of the problem stems from the fact that a publicly traded corporation needs to maximize profits which, ostensibly, contributes to a rising stock price, happy stockholders and board members and CEO compensation. As a result, hiring salesmen has proven to be a viable, beneficial corporate strategy.

On the other hand, it is my firm belief that clients are sick and tired of advisors trying to sell them products! They've had enough! When I meet with a prospective client, we discuss this very topic. It's very important to me that they understand that I have no intention of selling them anything.

In my view, making money is a byproduct of good service and advice....period! As an advisor, we have two choices. Choice number one is to try and sell the client as much as possible, to maximize the amount of money we get from each client. If our conscience doesn't revolt at this, an advisor can make a lot of money.

Choice number two is to focus on dispensing quality advice. If we do a good job at this, then the client will stay longer and tell more people about you, and you'll make more money that way than you would by trying to sell them products.

In closing, this post is really a thank you to all those sales-oriented advisors. As long as you exist, I will have plenty of work. But for all of you who agree with me, the gauntlet has been thrown down. Let's save those unsuspecting clients from the wolves in sheep's clothing.

Thanks for reading!

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