Consumers don’t know who to trust in the financial industry and the recent re-combinations and melt-downs haven’t helped. I look at how advisors operate on a continuum with two extremes: The Say Anything Advisor, and the Honest John.The Say Anything AdvisorFor the Say Anything advisor, the key goal is making the sale. Here are the five easy steps: 1. Gain trust by listening carefully to what a prospect says2. Pick up on a prospect’s biggest fears3. Harp on the fears4. Offer a solution to the fear that entails using well-researched buzz words that appeal to a prospects emotions5. Sell the advisor’s products.Here are some common fears and corresponding buzz words that Say Anything advisors use to hook people into buying products they don’t need: Buzz Words of the Say Anything Advisor:Prospective Client FearBuzz words to hook you into the “Solution”--repeat often!Reality behind the “Solution”I’m paying too much in taxesTax loopholeTax havenTax savingsTax freeLow or no return mutual funds that are only appropriate for the top 1% of taxpayersI’m might get sick and dieTake advantage of being healthy now in case you can’t get insurance laterProtect your “loved ones”Life insurance that you don’t needMy investments aren’t returning as much as they could Beat the marketOutperform the marketWe can do betterOverly complex “investment strategies” that seem to go in one direction--down.Some organizations focus on training Say Anything advisors and developing products to cater to the Say Anything Advisor side of the continuum. MorganStanley SmithBarney, Northwestern Mutual Life: I’m talking about you. I have met some Honest Johns among your ranks, but not many.What the Honest John Advisor will sayOn the other side of the continuum is the advisor I call the Honest John Advisor. The Honest John Advisor follows the following protocol: 1. Gain trust by listening carefully to what a prospect says2. Pick up on a prospect’s goals4. Offer solutions that help the client accomplish their goals that entail using well-researched, low cost strategies that take some effort to implement. 5. Help the client implement the strategies.Strategies of the Honest John:Prospective Client FearSolution proposed by the Honest John AdvisorAdditional CommentsI’m paying too much in taxesHave a qualified professional review your tax returns and see if they can offer suggestions on how you can save money.Often you can employ strategies retroactively and file amended returns. Also looking at your tax situation in advance often helps know what tax strategies to employ in a particular year.I’m might get sick and dieLive life to the fullest now! Get life insurance if you have dependents. Most people don’t need life insurance, but if you do, low cost term is generally available.My investments aren’t returning as much as they couldNobel-prize winning research indicates that you can’t beat the market and that relatively simple investment strategies yield the best results.Your money is better spent getting comprehensive advice rather than overly-complex investment advice from advisors trying to justify their fees. by Bridget Sullivan Mermel
