Over the span of my adult life, I have held only 4 jobs, including my hitch with the Army Air Corps in World War II. The one thing in common in all these endeavors was that in one way or another, I was selling. Most of the time it was a product, but at others times it was ideas and concepts. Both were important. But I observed early on that whether I was selling a complicated piece of machinery or the need to raise money for a church building, a good deal of teaching was an integral part of the process.
The basic principles that I used in teaching WWII fighter pilots were the same that I was taught to use when I became a salesman for the Stewart Warner Company and still later with New York Life. Make the student (prospect) comfortable with your presentation. Learn what the student (prospect) knows by listening and observing. Establish a level of confidence with the student (prospect). Agree on goals-pilot’s wings (prospect’s financial security). Close the sale-pilot graduates (prospect buys into the plan).
I thought about this recently during lunch with an old friend and policyholder who is now engaged in promoting the use of technology in K-12 classrooms. He related the success they were having in test schools and the marvelous tools, such as “smartboards,” that were changing the face of education. He also expressed a degree of frustration with his work with lawmakers who could not get past the dollar signs required for the transformation. In the end, he said, “putting a computer in the classroom and expecting it to teach is like putting a hammer in a vacant lot and expecting it to build a house.” He said nothing can replace the teacher who provides the interaction that makes it all work. Technology, as a tool, simply gives the teacher more time to interact one on one with the student.
That situation is not unlike our own business today. Computers take away much of the time-consuming operations and drudgery, thereby providing more time for interaction with clients and prospects. Our value as a salesperson (teacher) is enhanced by technology–not replaced. You can substitute salesperson with any nomenclature you prefer–agent, advisor, account executive, consultant, whatever–but the selling/teaching function is still there, and as a rule, that is the only thing we get paid for doing.
Recently I was reminded of what a pleasure it is to be served by a truly professional salesperson. Gladys and I set out to buy a refrigerator as a wedding present for our granddaughter. We knew the make, model and color she and her fianc? desired. We visited several “big box” stores, with no luck. The salespeople did not have the model in stock, were not able to look it up in their catalogs and were totally at sea as to when one could be delivered if it had to be ordered.
Then, at a smaller store, we met Roger. He had the model, in the right color, in stock and explained the features in minute detail. But he showed us the deluxe model of the same type and extolled the virtues of it with eloquence. Needless to say, we bought the deluxe model and were happy Roger was able to teach us the advantages it provided. Really good salespeople are hard to find–mainly because they can’t teach what they don’t know.
Coming back to the issue of nomenclature used by salespeople, a smoke-signal recently appeared on the horizon that may impact the use of the term ‘advisor.’ An appeals court recently overturned the “Merrill Lynch Rule,” thereby prohibiting stockbrokers and others engaged in trading stocks from using the term ‘advisor.’ According to an April 15 article in the Arizona Republic, the court was concerned with the blurring of lines between mainstream financial advisors and brokers.
According to the article, the debate involves more than just titles, for there are legal issues as well. True advisors must act as fiduciaries. Brokers, on the other hand, are not fiduciaries but salespeople placing trades on behalf of their clients.
Under federal securities law, brokers are required to make recommendations that are “suitable” to a client’s individual situation but without the fiduciary duty. It is worth noting that the issue of whether or not a life insurance agent is a fiduciary was settled many years ago in the Knox v. Anderson case. A life insurance agent is not a fiduciary.
The decision in the present case is the result of a lawsuit brought by the Financial Planning Association and was opposed by the Securities and Exchange Commission. Unless the Supreme Court reverses this decision, advisors must be persons offering fee-based services only and must be in possession of a Series 65 license.
One does not have to stretch his imagination very far to apply this same logic-and, perhaps, rule-to insurance people who hold themselves out as advisors. This seems to me to be particularly true for those holding various securities licenses and actively marketing securities. So far it is just a few puffs of smoke on the horizon-but the issue bears watching.
At any rate, it is a good time to be a salesperson teaching the public about the perils of financial security and the virtues and uses of our products-so vital to business and families.