Perilous paths: the temptations of a financial advisor

Pressure No. 3 is growing too fast. You started out as a solo practitioner. But in the last several years, you’ve added so many new clients you decided to hire three new employees.

What can happen? Your overhead soars. Your revenue doesn’t. Trapped like a gerbil on a treadmill, you begin recommending speculative investments with big commissions. Clients complain. Your state securities division audits you and decides to issue sanctions.

How do you avoid the trap? Manage your growth so you never have to recommend an unsuitable investment because you need the revenue.

Pressure No. 4 is getting comfortable. You entered the financial services business because you wanted to help people. You used to love the work, but now it’s getting a bit old. Clients keep asking the same questions. Carriers are a pain. Continuing education is a bore.

What can happen? Rather than find a new career, you just hunker down until retirement. Your edge slowly rusts. Many of your best clients notice – and take their business elsewhere. How do you avoid the trap? Keep learning about new products or planning techniques. Get involved with a professional trade association, ideally in a leadership position. Network extensively with others in the business. Get active in nonbusiness pursuits that stoke your energy and creativity. If you can’t stay excited, find something else to do.

The point is this: ethical lapses are more likely to happen when advisors make bad life decisions. Don’t let this happen to you. Here’s how:

• Keep your life in balance.
• Don’t hang with a bad crowd.
• Manage your business growth.
• Keep your professional edge sharp.

Do all this and your path through financial services should be profitable and enjoyable – and free of nasty falls.