Having frolicked in the financial services playground for the past 20 years, every now and then I come across the ambitious young buck who knows just enough about financial advisors that he actually believes he can become a great one. I can recognize the look in his eyes because he used to be me.
Usually, Mr. Buck has had some type of close, professional contact with advisors. Perhaps he is a wholesaler or a broker-dealer home-office employee. As I probe to find out what makes him think he can be a financial advisor, I get this response, which rarely varies: “If that bozo can do it — and make that much money — then so can I!”
More often than not, such bouts of delirium generally occur after Mr. Buck has had some dealing with an advisor where he was more knowledgeable than the rep. The logic goes something like, “This dude doesn’t even know what I know, and he’s making a ton more money than me and going on all those great trips! I can do that!”
I’ve taken it upon myself to be the needle in the balloon of life, popping any hopes or dreams these poor, misguided bucks may have.
First, I always ask, “What makes you think you’d be a good financial advisor?” One starry-eyed young buck I met, Buck One, mentioned that most of the reps he talked to knew nothing about the Correlation of Assets or the Efficient Frontier. Then, while he was still looking smug, I asked, “How are you going to get your clients?”
Here’s where the trouble really began. “Ummmmm . . . Well, I would probably . . . I know a guy . . . maybe I’ll buy a book . . .” Blah, blah, blah.
Another dreamer I came across, Buck Two, thought he could build a better mousetrap. His idea was to focus on the psychological aspects of investing. B2 asserted that by catering to clients’ emotional and psychological needs, the commissions would soon be flowing like a river.
Again, it was my turn to be the dark cloud on a sunny day. “How are you going to get your clients?” The response was the same (and I’m paraphrasing here): “Ummmmm . . . Well, I would probably . . . I know a guy . . . maybe I’ll buy a book . . .” Blah, blah, blah. I pointed out to Buck Two that most older men I know have a hard enough time talking about their feelings with their spouses, let alone a pimply faced Opie Taylor look-a-like.