Mistakes Financial Services Providers Make

We got a call the other day from a prospective client, who was referred to us by a good client. In an established financial planning practice, referrals are the life blood of new business development. This conversation immediately went to products, with the prospective client rattling off several questions about various mutual funds he’s heard about and whether we would recommend them to him……I wanted to scream WHAT ARE YOU TALKING ABOUT!

This story cuts to a much bigger problem that is promoted every day and endlessly by the financial press, product vendors, and licensed securities people. The problem sounds something like this: “I have something better than you have,” “I have an investment that was the best performing thing last year,” “I can help you earn a better return,” blah, blah, blah.

What everybody needs to understand is that financial planning done right is one of the single most important investments you will ever make. In our practice, we serve people primarily over the age of 55 who are either seriously beginning to plan for their retirement or they are already retired. In talking with those clients I have come to understand that what they really care about is addressing any number of serious concerns and questions: Do I have enough? How much do I need? How do I take my nest egg and convert it to a reliable and sustainable income? And that’s just to name a few.

So if we go back to our conversation with that prospective client and think about the media, the product advertisements and the sales mentality of the Financial Services industry, you must recognize on some level that it is all aimed to confuse you and create doubt about whether you’re doing the right thing. In essence what this relentless machine is trying to do is to create a transaction, a sale. I encourage you to ask yourself, how is this serving me and my family? Your life and your future financial security is way too important to be led by the product!

Financial Planning in its true sense is about your life, your hopes, your dreams, and your concerns. When you have clarity on that stuff then you’re truly ready to begin the planning process, which is about the numbers, cash flow, income, portfolio construction etc. It’s about looking at various scenarios and determining a plan of attack that will give you a high probability of success. Then and only then, when we have done the work, can we make thoughtful recommendations as to the appropriate suite of products and services. When I talk with good clients they realize that at this stage of their lives they need to minimize mistakes, as there is not ample time for do-over’s, they don’t want to do things that will inevitably cost them money unnecessarily. They want to be pragmatic and educated around the fact that they made solid product choices based on their unique circumstances.

So the next time you open the paper, turn on the TV, log on the web, and you see ads about “my product is better than yours, has performed the best, has 5 stars yada, yada, yada”,….. Ask yourself who does this serve?

s. joseph disalvo

S. Joseph DiSalvo, ChFC, President of Quest Capital & Risk Management, LLC, has more than 15 years of experience in the financial services industry. He is passionate about helping clients build successful Financial Life Plans to align with their deeply held values and life aspirations. He founded Quest Capital & Risk Management in 1997 to create a unique business model that looks beyond a personal financial statement to help clients build their best life plan. Visit us at: http://www.questcapitalmanagement.com