It Will Cost You Money If You Don’t Know This About Your Financial Advisor

I had the unique experience of watching and witnessing the gyrations a wealth advisory team would go through in order to “land a client” as an In-House Tax Strategist for a “Wealth Management” office. My task, of course, was to provide value-added services to current and prospective customers. Ok, not quite. I had that goal in mind, but in fact, it was just another way for the “financial advisor” to get in front of a potential client. In reality, the single goal of “getting in front of another prospect” guided every decision. E.A. Buck Financial Services – Kailua-Kona Financial Advisor has some nice tips on this. Consider it this way: A Financial Advisory Firm would earn tens of thousands of dollars for each new client “they land,” as opposed to a few hundred dollars more for doing a decent job for their current clientele. Because of this, the structure of a financial services company will determine what is most important to them and how it will impact you as a client. This is one of the many reasons Congress passed the new Department of Labor fiduciary legislation this spring, but more on that in a future post.
When a financial consulting company devotes all of its time to prospecting, you can be confident that the advice you’re getting isn’t completely beneficial to you. It costs a lot of money to run a successful wealth management firm, particularly one that has to prospect. Seminars, seminars, mailers, ads, support staff, leases, and the most up-to-date sales training can run into the hundreds of thousands of dollars for any size company. So, when you sit across the gleaming conference table from your lawyer, remember that they’re considering the dollar sum they’ll need to purchase your properties and will be allocating that to their own budget. Maybe that’s why they get irritated when you tell them they have to “think about it”?
Focusing on closing the sale rather than allowing for natural growth is akin to running a doctor’s office and devoting all of the time to bringing in new patients, demonstrating how wonderful they are, and determining the best way for the doctor’s office staff to close the deal. Can you picture it? I’m sure there will be a shorter wait! Oh, I can almost smell the freshly baked muffins, hear the Keurig in the corner, and reach into the refrigerator for a cold beverage. We don’t get the feeling when we step into a doctor’s office, luckily or sadly. In reality, the opposite is true. The wait is long, the room is a little claustrophobic, and friendly service is not the norm. That’s because health-care providers devote more of their time and energy to learning how to treat you as you step out the door rather than as you walk in.