I just got off of a virtual panel discussion for NAPFA, and in the course of a long conversation, I made a point that seemed to surprise the other panelists. I said that brokers and sales agents are essentially predators, wolves in sheep’s clothing, where the sheep are fiduciary advisors, and the clothing is, well, you know what it is: ‘fee-based’ and ‘best interest’ (instead of fee-only and fiduciary). One of the panelists talked about sales, which I define as having a pre-determined goal for the customer meeting, where you hope to convince the other person to make a decision that will be in your best interest, rather than his or hers.
But then I said that the image of a wolves in sheep’s clothing is normally interpreted as a huge herd of sheep and a few prowling wolves who kind of look like sheep if you ignore the yellow greedy eyes and the teeth sticking out from under the fleece. But in the financial services marketplace, the reality is a crowd of fleece-clad wolves (brokers) as far as the eye can see, and you have to be pretty observant to notice a few actual sheep (fiduciary advisors) in their midst.
A consumer wandering into this herd would be extraordinarily lucky to find a fiduciary advisor among all those predators. And it’s helpful to remember that, from the outside, it is mighty hard to see who has real expertise and a real servant’s mindset toward clients, and who has been turned loose to prey on consumers with a couple of weeks of sales training and a mission to sell the company’s asset management service (filled with separate accounts that make generous under-the-table payments to the brokerage firm). You look at the broker and you don’t see the sales incentives built into the grid, and you certainly aren’t going to find any of that clearly spelled out in the 33 pages that Merrill Lynch helpfully provides to explain how its brokers are paid.
The statement that seemed to surprise the other panelists is that every fiduciary advisor has an obligation (yes, an obligation) to market yourself aggressively, so that those consumers wandering into the herd have at least a chance in hell of finding you. Every client you bring onboard is somebody who might otherwise have been working with an ‘advisor’ whose goal is to turn as much of his/her retirement portfolio into fees and commissions.
I call this an obligation in the sense that every profession must, as part of its structure, serve the public in a positive way. Doctors, CPAs and (to some extent) lawyers have this built into their codes of ethics and professional DNA—and why should advisors be any different? I believe that it’s not enough to do a great job for the clients who are lucky enough to find you; you have to make yourself visible, even prominent.
The panel discussion talked about whether ‘sales’ is a four-letter word (in the strictest sense it is), and I believe that my definition makes ‘sales’ as nasty as some of the words that are banned from family publications. But marketing yourself is different; when somebody has a product or service that benefits the public, those benefits, clearly articulated, should be marketed as a way of helping people find them. In a (very hypothetical) marketplace where there were only sheep, only fiduciary advisors, this would be an important contribution to the benefit of the world. But in a marketplace that is swarming with predators, it is doubly, triply, quadruply important.
Of course, our panelists talked about how to do this. But I might suggest that advisory firms lay out what I’m saying here: that 90% of the firms and people calling themselves ‘advisors’ are predators who want to sell you something.
Don’t believe it? If you decide to meet with them, ask them to sign a fiduciary oath, so you know that they will be required, by contract, to put your interests first in their recommendations. They will give every excuse in the world not to sign that piece of paper, but the real, simple reason is that their firms’ attorneys won’t let them lie about their real intentions on a written contract.
And then you can say that working for you, rather than against you, us just the beginning. If you’re looking for sound financial advice on any important topic, come in and let us see if we can help you. If we can’t, we’ll tell you, and help you find someone who can.
You might include these words as a tag line in your blogs, and certainly on your website. Let people know that the herd can be a dangerous place, but that there are safe havens, fiduciary advisors, who won’t be coming at them with a sales agenda.