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It can be difficult for someone in the financial services industry
to know how the investor feels, especially when first choosing which
advisor to work with. I recently had an experience that put me in
your shoes for a change.
A couple of mornings ago, my teeth began hurting for a short time
after I brushed them. It had been awhile (too long) since they were
cleaned so I decided to go to the dentist for a cleaning and
check-up.
I only have one set of teeth and I know that they need to take care
of me for the rest of my life. Unless I want to exist on soft food,
it's vital that I take care of them. Likewise, someone retiring only
has one nest egg and their lifestyle and ability to remain retired
will depend on what happens to it. Make a mistake and you can lose a
good portion of it.
How do you choose an advisor? How do you choose a dentist? I could
look in the phone book and I can ask people that I know whether they
are pleased with their dentist. Still, how do I know if their
experience with a dentist is going to be the same as mine? It's not
like you can interview a dentist, get a price list and an extensive
list of references!
Worse, the reason I was looking for a new dentist was because I
wasn't pleased with the dentists I'd used in the past. Surely this
time I would find one that I would like! So I called a dentist that
seemed to do a good job for another family member and I set an
appointment.
A red flag went up during the first call. I asked for an appointment
after the stock market was closed for the day and amazingly, they
just happened to have had a cancellation and I could get in that
very day! Having a sales background, I know that's a common tactic
to use because you don't want to give the impression that you aren't
busy.
Another red flag was raised as soon as I walked into the office.
There was leather furniture, a cafe and a plasma screen television.
The coffee table featured literature on various cosmetic
improvements. The plasma TV, it turned out, was just playing a loop
designed to sell those improvements. I never realized that having
whiter teeth would have such a positive impact on my entire life!
The phone sales tactic I picked up on was confirmed when I heard the
receptionist say the same thing to others that were calling in. In
the financial services industry, these are seen as harmless
statements. "It's no big deal, they'll never know," the advisor
might explain to the assistant. Maybe I'm old fashioned, but I don't
want to be treated that way and neither do my clients.
Soon, I was ushered into the chair where I thought I was going to
have my teeth cleaned. After a few pleasantries, the dental
assistant said that she needed to take some x-rays and that they
recommended the 360 degree one. "It is $199 for both sets, is that
OK?"
While examining my gums she mentioned that oral cancer was very hard
to detect and affected many people. They had a test that would
screen for it and it only cost $49 would I be interested? No.
My appointment was for a cleaning. But all I received was the x-rays
and the initial consultation. It's possible I have a cavity under
one of my existing fillings and the dentist recommended it be fixed,
not with a traditional filling but with a new crown that would be
much better.
I left feeling like I paid $200 for some x-rays and a sales pitch.
The full cleaning, it turns out, will cost over $500! That partial
crown would only be $850! For comparison I called another dentist.
This one seemed to be more old school. His cost for a cleaning?
$110.
Have you ever felt like I did after going to an investment advisor?
Undoubtedly, some of you have and I am ashamed to say that it is
becoming more common. There are advisors out there, though, that are
more focused on your needs than their own. Trust your red flag
indicator, don't move quickly, and do extensive research on any
recommended products.
Nationally-syndicated financial columnist and Certified Financial
Planner(R) Jeffrey Voudrie provides personal, in-depth money
management services and advice to select private clients throughout
the USA. |
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