Author Topic: Maybe I should become a "financial advisor" aka salesperson...  (Read 1429 times)

NorthernDreamer

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Maybe I should become a "financial advisor" aka salesperson...
« on: September 20, 2016, 10:31:23 AM »
A friend of a friend on Facebook just put out a PSA that her financial advisors have been "recognized in the top 1% of financial advisors" and saying that she highly recommends them to anyone looking to invest. Someone asked how the top 1% is determined. This was the financial advisor's answer:

"Net New Business!

Brokers are criticized annually for the amount of new business they've brought in and that number is reduced by the amount of business that's left.

To clarify "Net New Business"... For example, if I take on 20 new clients who collectively have $1M and I already manage $20M that earns 10% on average, I'm up $3M. If my retirees are collectively taking $1M per year in income, I'm down to $2M. If I also sell life insurance policies which have premiums of $200k for the year but some clients cancel or pass away to the tune of $10k, I'm up $190k. If I write 100 new mortgages per year totaling $10M....

Anyway, all of these numbers are punched into a crazy algorithm and then someone sends me a letter saying 'congratulations, you're __th out of almost 10,000 independent brokers in the country.'

When you do as good of a job as xxxxx and I do, your Net numbers and your Gross numbers are pretty close ;)"

WOW. How do people not realize that they are just salespeople being rewarded for selling products? This doesn't even touch on what happens if they perform worse than a benchmark, e.g. index funds. I'm just thankful I left this crooked game before it ate too much into my retirement plans.

Retire-Canada

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Re: Maybe I should become a "financial advisor" aka salesperson...
« Reply #1 on: September 20, 2016, 02:23:33 PM »
WOW. How do people not realize that they are just salespeople being rewarded for selling products?

Half of the people are below average*.

* - that should be median, but if I wrote that the audience for this joke gets even smaller. ;)

Chris-93AUS

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Re: Maybe I should become a "financial advisor" aka salesperson...
« Reply #2 on: September 20, 2016, 04:25:13 PM »
Not all Financial Advisors are crooks and salespeople. Fee for service advisors are generally better than commission basis, and I'm certain that its a similar situation to other professions like lawyers. A few bad advisors give the rest a bad name.

Personally I think there are some situations where an advisor can really help, taxation/estate etc, specialist knowledge that I'm willing to pay for especially if I know exactly what I'm paying, and what the net benefit is.

Although based on your friend of a friend's post, that whole thing doesn't look too great.

Frugalman19

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Re: Maybe I should become a "financial advisor" aka salesperson...
« Reply #3 on: September 21, 2016, 07:42:23 AM »
There are plenty of good financial advisors out there. If you stay away from the commissioned broker and make sure your advisor is a CFP, you will be fine. No one on here is going to pay an advisor for investment services though, that would be the same as going to an auto repair forum and complaining about how much people pay to get their oil changed.
Most people need an advisor because most people do not trust themselves and most people simply want nothing to do with it.
If your financial advisor sells life insurance or mortgages, run for the hills and find a fiduciary.

NorthernDreamer

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Re: Maybe I should become a "financial advisor" aka salesperson...
« Reply #4 on: September 21, 2016, 10:44:18 AM »
I shouldn't paint them all with the same brush, for sure. I am referring to the commissioned brokers, who I feel like many people default to since it is "easy" to just go with someone your bank recommends (or your friend on Facebook...).