Impressive titles like "advisor", “consultant”, "planner" and “specialist” sound better even though anyone can use them (more examples). Designations look impressive unless you explore and conclude they are sales-oriented too.
Regardless of title, advice has little value if biases (real or perceived) are built-in. Surveys routinely rank advisors among the least trusted professions.
FiduciaryDo advisors use the word "fiduciary" to describe themselves? A fiduciary is legally required to put your interests ahead of their own. A salesperson does not have that burden. Buyer beware.
Becoming a fiduciary is not the answer. If something goes wrong, even fiduciaries can have trouble proving they acted properly. That's the consequence of hindsight, selective memory and emotion. Lawyers play a role too.
AdvocateWhat about “advocate”?
An advocate is on your side. An advocate educates you. An advocate makes a stand in public — even when that conflicts with their industry. An advocate points out what the fine print really means to you. Seller inform.
An advocate isn't a rebel who wants to "tear down the walls from the inside" and tell-all. An advocate wants to make improvements within the system. That takes more skill but leads to better, faster results for you. Experience as an insider helps an advocate help you.
What's stopping advisors from becoming advocates for you? They may already belong to organizations which are advocates for them.
ProofAnyone can call themselves an advocate but no one can prove they are one.
At best, an advocate can demonstrate they are on your side with their actions. Since an advocate could get corrupted, look for
- what they’ve done in public, and
- what they continue to do in public.
When Turtles announces a return to the "original recipe", you might wonder if that’s because they tried to sneak in cheaper ingredients … and lost. When Fido mobile announced “now easier to speak to a real person”, perhaps that’s because they cut service … and lost. There was a time when Enron was trusted. Before the financial meltdown, long-established companies like AIG were considered solid too.
Advocacy might be a ploy but that’s tough to fake for years.
PriceA salesperson often works for "free", which means for sales-based commissions, bonuses and other incentives. How does an advocate get paid? Probably by charging for the advice. Would you pay?
“Fiduciary” is a scary word for advisors and “salesperson” is scary for you. “Advocate” looks ideal. Just make sure you select a real one.
- Can an advisor serve two masters? (new)
- Corporate Governance 2011
- What’s worse than fineprint?
- The least prestigious professions
- Is the best advice free or for-fee?
- Canada’s insurance loophole and beyond
- No fiduciary standard needed in Canada (advisor.ca, May 2011)
- image courtesy of Kevin Rosseel (Washington, DC)
Podcast 151 (4:21)
direct download | Internet Archive page | iTunes
PS Are an advocate for whoever you serve?