| Every year millions of investors fire financial | | | | compliance records. |
| planners and financial advisors because they did | | | | Investor Alternative: It's ok to like advisors after |
| not meet their expectations for results and | | | | the professionals provide proof they are |
| service. Then these investors "hope" the | | | | competent, ethical professionals who put investor |
| replacement advisors will be better than the | | | | interests first. |
| advisors they just fired. However, surveys show | | | | Advisor Sales Skills |
| these investors use the same advisor selection | | | | The primary skill for most advisors is sales and |
| processes they used in the past to select | | | | not investing your assets. Consequently, most |
| replacements. Consequently, there is a high | | | | investment recommendations are pitches to sell |
| probability they will fire the new advisors in a few | | | | particular products. Actual investment decisions |
| years after suffering additional disappointments. | | | | are made by third party product companies |
| There has to be a better way to select a | | | | (mutual funds and annuities). Friendly advisors use |
| competent, ethical financial advisor. It starts with | | | | their sales skills to build relationships and convince |
| having a basic understanding of what investors up | | | | investors to buy what they are selling. |
| against when they select planners and advisors. | | | | Investor Alternative: The question investors |
| Wall Street Hype | | | | should be asking themselves is whether they |
| Investors put too much emphasis on brand | | | | want sales representatives investing their assets. |
| names. In fact, one study showed 62% of | | | | If the answer is "no" then investors must |
| investors selected advisors based on the | | | | minimize the impact of sales skills when they |
| companies that employed or licensed them. This is | | | | select advisors. If they do not, they will select |
| major mistake. Big investment firms spend | | | | advisors with the best sales skills and not advisors |
| hundreds of millions of dollars per year building | | | | with the best qualifications. |
| brand names. Investors assume these firms are | | | | Background Checks |
| big because they provide superior investment | | | | One of the biggest mistakes investors make is |
| advice and services. The reality is they are big | | | | letting advisors control the information that |
| because they have thousands of financial advisors | | | | investors use to select financial professionals. |
| and sophisticated marketing strategies. | | | | When advisors control information, investors hear |
| Investor Alternative: If these companies produced | | | | what advisors want them to hear. For example, |
| superior results they would not have to cheat | | | | they omit information that may have a negative |
| investors to maximize revenues and profits. | | | | impact on their sale results and they misrepresent |
| Investors must discount the impact of brand | | | | information so they sound like financial experts |
| names when they select financial advisors. The | | | | who produce exceptional results. |
| size of a company's advertising budget has | | | | Investor Alternative: Require background checks |
| nothing to do with the competence and ethics of | | | | that validate advisor information. Use the services |
| the company's financial professionals. | | | | of an independent company that has experience |
| Advisor Personalities | | | | evaluating the backgrounds of financial |
| Financial services companies know investors trust | | | | professionals. |
| people they like so companies hire advisors with | | | | Advisor Documentation |
| easy-to-like personalities. Once like and trust are | | | | Another major mistake is accepting verbal |
| established advisors can sell products that make | | | | information from advisors. Verbal information is |
| them and their companies the most money. | | | | contained is sales pitches that have one purpose |
| Personalities have nothing to do with advisor | | | | – sell investment products. Lower quality |
| competence and ethics. In fact, pleasant | | | | advisors prefer verbal so investors have no |
| personalities frequently mask advisor weaknesses, | | | | written record of what was said to them to gain |
| for example lack of experience and bad | | | | control of their assets. |