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Do Yourself a Favor

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It has been often said that there are two kinds of people in the business of financial planning — those with marketing skills and those with investment skills.

Marketers often hold seminars, do a lot of promotional work, have client appreciation seminars and gravitate toward one product or idea. They are often extroverts. Marketers typically become expert at the exposition of this one product or idea. If a customer appears, he or she is likely to be exposed only to the one idea. Other ideas may be discussed, but, basically, they are arranged to funnel toward the end result, which is based on the one product or idea.

If one believes the tenets of financial planning, one product, no matter how good it is, is probably not the best approach for all customers. It shoehorns every one of them into the same box, regardless of wants, desires, needs or health. For example, if a customer is likely to live only three years, is it wise to sell him or her on the idea of an investment or indexed annuity that will provide a lifetime living benefit after 10 years have passed? Is it a great idea to tie up a widow’s funds if she has no way to get at cash for emergencies?

Those with investment skills are more academic and often don’t like the limelight as much. They are less likely to hold seminars or spend much time in self-promotion. They like the processes and research involved in finding good stocks, bonds, ETFs and funds. Often, they struggle to make ends meet. They are often somewhat introverted.  

Marketers always make more commission and fee income than those with investing skills, unless the individual is someone like Warren Buffett or a hedge-fund owner. (The former is an investor, and the latter is more likely a marketer, but with traces of high-stakes gambling added.) You could argue that WB is a marketer. I would contend that he is a marketer by accident and not by design.

But I digress. Really, this discussion is about our business, not Berkshire or a tricked-out and gussied-up hedge fund gunslinger. So, marketers make more moolah. Since they often take up-front compensation, they don’t really care as much about the retention of new business once it is on the books and the compensation is paid. Investor types gravitate toward level fees and worry always about maintaining customer satisfaction — it’s their lifeline.    

If you are a marketer, I have three ideas for you to consider: 

(1) Find an investment expert and work with him or her 50/50 to build a billion-dollar book of business. You do all the marketing lifting and let him or her do all the investing lifting.

(2) Hook up with people like the folks at The Sherman Sheet and let Bill Sherman be your investment department.

See also: The Sherman Sheet

(3) Or find a third-party manager you like, one that can manage money inside annuities and on its trading platform (as approved by your BD or advisory firm) and market it, along with yourself. In both ways, you will be doing customers a favor, and you’ll be doing the industry a great favor, too. The more professional, diversified and expert we all become, the better our profession will be.  

If you are someone with investment skills, I have two ideas for you to consider: (1) Find a marketing expert and work with him or her… Well, you get the idea, right?

Have a sensational week and find your opposite number so that you may make beautiful financial planning music.  

Speaking of music, particularly big band music, may I suggest a CD? It’s “On the Sammy Side of the Street,” by Sammy Nestico. The arranging and band leading, by a man who has produced charts for Count Basie, Tommy Dorsey, Quincy Jones and the TV shows “M*A*S*H,” “The Mary Tyler Moore Show,” and “The Bob Newhart Show,” plus specials for top vocalists (he even worked with the U.S. Marine band at the White House for five years), is superb. The musicians are incredibly skilled, and the selection of songs is top notch. You can find Sammy Nestico’s music and “The Sammy Side of the Street” at

My copy was given to me by Gordon Case of The Sherman Sheet as an unexpected gift, which makes my reference to Bill Sherman above a kind of payola. (But I guess it isn’t too corrupt, if I tell you about it, right?) You can reach Gordon at [email protected]. I’ll let you figure out if I’m in this for the free CD or trying to come up with ideas to help all of our practices. And, yes, Gordon and I are longtime friends, and both of us play the drums.   

For more from Richard Hoe, see:

Some Nice Words About Ron Paul

Unemployment, Republicans and the Market

Target Date Funds


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