I’ve been in the financial services industry long enough to know the dirty little secrets regarding how things are done. It never ceases to amaze me what some so-called “financial advisors” will do to earn a buck. This morning, I was sitting in a local coffee shop and overheard an advisor pushing a product on what I’m sure was an unsuspecting client or prospective client. The words he used were so definitive. He described his recommendations in terms that made sense. He had an answer for everything. But he was selling her a load of garbage!
I sat there with no intentions of being nosy yet couldn’t help but pick-up on the fact that the information the prospect provided him clearly showed that his recommendation was unsuitable for her. Understand, I don’t know all the facts concerning this woman’s situation; however, it has been my experience that clients too often don’t do their homework before signing on the dotted line.
Thankfully, in this case, I had the brief opportunity to encourage her privately to ask him how much he will get paid if she took his recommendation. When I anxiously overheard him finally come clean upon her request concerning his $17,000 (!!!) commission, she shifted in her chair and gave me a nervous glance. I don’t know how things will turn out for her, but I certainly hope you’ll consider asking the question to your advisor the next time a recommendation is made. When you understand how someone gets paid, you may just understand their motives.