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“Listen to a
man's words and look at the pupil of his eye. How can a man conceal his
character?”
Mencius, Works (FourthThird Century b.c.)
If you're going to
disclose your entire financial picture, including your values, goals, and
current assets and liabilities and delegate the creation and implementation of a
tailored financial plan you want to work with someone you can trust: someone
who is both competent and caring, professional and proficient. Someone who
wants more than to sell you a mutual fund, an insurance policy, or investment
management services. Someone you can count on to keep the big picture in mind,
the needs of you and your loved ones foremost, and the details of your personal
finances confidential. What you want is a Trusted Advisor(tm).
"Trusted Advisor" is a term I've trademarked to describe the kinds of
financial professionals who come to me for coaching the kind of people who are
interested in taking their businesses to the next level of value and meaning for
their clients. They attend my seminars and listen to my audiotapes out of a
desire to find and serve people who want a relationship with an expert rather
than a transaction with a salesperson. Of course, being a Trusted Advisor
requires more than learning a certain set of skills or adopting a new level of
professionalism; it means that the advisor has to actually earn and maintain the
trust of clients.
In your search for the right person, you may encounter three types of
individuals:
- the
"scientific" salesperson
- the
so-called consultant (who is actually a salesperson pretending to be a
financial planner)
- the
genuine article: the trustworthy and competent advisor.
It's unfortunate that they don't hang out a
shingle to let us know which group they fall into. Their titles are no
indication, either. Stockbroker, insurance agent, financial planner, financial
advisor, financial consultant, estate counselor, CFP, CSP, CLU, ChFC: none of
these labels is a clue. Neither is the big-name company they might represent. So
you must assess each individual based on a set of characteristics and, ideally,
recommendations from a friend, family member, or another advisor. The Trusted
Advisor rarely advertises, makes cold calls, or direct markets, so you are most
likely to find one by referral.
Characteristics of Salespeople versus Trusted Advisors
What do the salespeople in most used-car lots, some appliance and shoe stores,
and all telemarketers who call during our dinnertime have in common? They make
us cringe because of their sales methods. We have come to expect any interaction
with these people to leave us feeling put off by their rabid, script-driven
enthusiasm to make the sale no matter what.
The bad news is that some people in the financial industry have been trained in
the old-fashioned manipulation methods; many of them can persuade us with more
subtle tactics, but they're still tactics, nonetheless. For a lot of them, it's
just the training they got, or advice handed down from one generation to the
next. There are plenty of nice, honest, hard-working people who work for
companies whose training methods are more than thirty years old.
What's the good news? There are plenty of financial professionals who have moved
on from those transaction-oriented sales techniques (or who never employed them)
and are more concerned with client-centered practices.
David Bach, the author of the book Smart Women Finish Rich and an exemplary
Trusted Advisor, enjoyed telling me the story of a man who came to make a stock
purchase from him. The fellow came in, requested a $10,000 transaction, and was
floored when David told him that he couldn't do the deal.
"Why not?" the man asked.
"Well, I don't do that," David said.
Perplexed, the man looked around David's office. "What do you mean, you
'don't do that'? Where am I? I'm at Dean Witter, right?"
"Yes," David smiled. "You can buy that from someone else here,
but you can't do it with me. I work differently."
"Well . . . what the heck do you do?"
David told him that he was in the business of preparing comprehensive plans,
that he wanted to know what was important to this man, to plot his goals and
financial picture on a Financial Road Map, and then come up with a strategy that
would fit with his overall game plan not just help him make a random purchase
because the man thought it was a good idea that day.
Although the man was surprised that David wouldn't just take his money, he was
also intrigued by this different way of doing things. He happened to have all of
his financial documents because he had grabbed the file to make the purchase, so
they proceeded right then and there with a Values Conversation, goals
prioritization, financial review, and creating a Financial Road Map. This man
became one of David's most grateful clients because he had over a million
dollars scattered in more than fifteen accounts. Today, he receives a
consolidated statement instead of multiple statements throughout the month, he
makes financial decisions based on a comprehensive strategy, and he has David as
his Trusted Advisor. This man hadn't known that such advisors existed, but once
he did, he recognized this was the way to go for him.
You can see that it's incredibly easy to spot the Trusted Advisor when you
encounter one. It's also easy to spot the salespeople and avoid them once you
know their underlying objectives and principles.
The most basic distinction between a salesperson and a Trusted Advisor is that
salespeople are looking for a need to fill and they want to fill it no matter
what. They try to identify one of your financial needs and sell you a product to
satisfy that need. They tend to ask what they call "probing
questions." Have you ever been asked something that made you feel like you
were being backed into a corner, and your only way out was to buy the product?
Salespeople also call this "digging you a hole and throwing you a
rope." The follow-up they do is intended to sell you other products to meet
other needs until they get most or all of your financial business. They also
call it "dripping" on you. (Pleasant metaphor, don't you think?) They
point out pain and problems, try to make you uncomfortable, and motivate you to
buy more, contact them, or respond when they call.
In contrast, Trusted Advisors will not sell you anything before they see your
whole financial picture: this means all of your financial information. So if you
refuse to show them everything, they will refuse to work with you. At first, the
salesperson's approach may sound more service-oriented or even more rational:
"Let's just take care of one thing at a time...". But it's not. Just
as your skeleton, muscles, nervous system, and cardiovascular system are
interdependent, so are the various aspects of your financial life. A real pro
will not allow you to relegate him or her to working in a vacuum; this would be
like a doctor who makes diagnoses and writes prescriptions without a full
examination and family history. You can find doctors like that, but is this who
you'd really want to entrust with your health?
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