RISCARIO INSIDER: UNETHICAL EMAIL? DO ADVISORS PUT THEIR INTERESTS FIRST?

July 7, 2012

UNETHICAL EMAIL? DO ADVISORS PUT THEIR INTERESTS FIRST?

This week, an email from an insurer encouraged advisors to make more money by selling investments.

The e-mail was titled “Summer Project: 7 Ways to Increase the Value of Your Book and Generate More Revenues.” Let me translate that for you: It’s a suggestion that advisers sell certain products to their clients to generate maximum commission and fee revenue.
--- Unethical email: rogue sales reps or Standard thinking? (Rob Carrick, The Globe & Mail, Jul 4, 2012)

What’s your reaction?

Other Examples

There are lots of attempts to help advisors sell more. Here are recent examples from publications directed at them.

Prospecting: Without a consistently full pipeline, you will struggle to meet your sales targets and goals. You will experience peaks and valleys and a great deal of frustration. Unfortunately, very few companies actually teach salespeople how to prospect effectively. --- 3 Essential Skills Every Salesperson Needs, Part 1 (LifeHealthPro, Jul 5, 2012)

It’s rare a prospect will say, “Stop talking, you’ve convinced me. Where do I sign?” Instead, you’ve got to ask for the business. So how do you do it?
--- 6 Ways To Close A Prospect (Advisor.ca, Jul 3, 2012)

Here are some steps you can take to gain a greater share of wallet from your current clients. --- Gaining New Business From Existing Clients (Investment Executive, Jun 21, 2012)

“An appeal from sales managers: too much money is being left on the table. Cross sell. Build with life insurance and investments and then follow through with living benefits. One sale can lead to another.”
--- Advisors Should Cross-sell More To Ensure Clients Are Fully Protected (The Insurance & Investment Journal, May 2012)

What’s the issue? Advisor need to eat. Everyone does.

The difference lies in the perception. You expect a salesperson to sell you stuff. An advisor? Maybe not. You might think (or hope) that an advisor is on your side but "fiduciary" is the word advisors imply but dare not say.

How Vendors Think

For practical purposes, products from different companies are interchangeable. Since vendors know this, they look for others ways to entice advisors to sell their products.

Perhaps there are ways to help advisors

make selling simpler (e.g., improve productivity with better point-of-sale material)
make more sales (e.g., by making new offers to current clients)

A vendor that helps advisors boost their revenues expects more business in return.

How Advisors Think

Advisors who need to show proof of continuing education may go to presentations from vendors because they're usually free. There they'll get information that isn't recorded or on the official slides. That's where money making tips are more likely found. Other places are private meetings, lunches or phone calls. Again, there's no trace of the discussions.

An advisor can't tell what's best for you. That's because the advisor isn't you. We each make our own decisions based on factors that may not make sense to anyone else.

Why wouldn’t a typical advisor push products that pay more or are easier to sell? The advisor is better off financially and you're not much worse off. Besides, you're not forced to buy.

The job of salespeople is to make sales to people. You’re not forced to buy. Before deciding, you can make sure you understand the fine print and get independent advice. Buyer beware.

Podcast 176

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PS Do you think your advisor puts you first?

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