Am I Working With a Financial Planner or a Salesperson? Part II :: Wamhoff Financial & Accounting


Am I Working With a Financial Planner or a Salesperson? Part II

The first portion of this topic was covered in the previous blog post where I discussed the differences to look for when entering a financial planning office for the first time. However, what is the most important aspect to consider is whether you are working with a salesperson or a financial advisor who will provide quality financial advice.

Upon entering the financial advisor’s actual office, the first thing you should look at is their desk. Ignore the pictures of their family, ignore the pictures of their children, and ignore the artwork or interesting artifacts they have in view. Focus on their desk and what is in front of you when you sit down.

Upon sitting down with the advisor, what is in your immediate view? Is the desk full of glossy sheets with pie charts and investment information? Do you see a stack of white papers with “Sign Here” stickers all over them? Do you see glossy booklets with investment company information all over them?

What you see on the desk in front of you is extremely important. A stack of white papers with “Sign Here” stickers all over them may be a sign that the advisor is going to try to “sell you” an investment product in the first meeting. Generally speaking, if an advisor attempts to sell you a product the first time meeting with them they are likely a salesperson and not an experienced financial advisor.

A different example that could be problematic would be sitting down and having traditional small talk. Information about your family, where you work, your children, or your hobbies could all be discussion topics. Slowly the advisor shifts the focus onto what you are looking for in an investment. Suddenly, the advisor begins talking about specific investments and showing you investment booklets. In very short order the conversation has shifted totally to the investment and away from you. This is a warning sign that you could be working with a financial salesperson.

In another example, you may find yourself sitting through a very long meeting where the entire focus is on investment information. Initially you feel overwhelmed, but you continue to listen and answer questions. The meeting feels like the advisor is getting to know your investment goals and objectives. However, right about the time you think the meeting should end the advisor attempts to “close you”.

This process is easy to identify because the advisor is going to want you to sign paperwork and they will want you to provide them with a lot of financial information, social security number(s), and driver’s license information. If you have experienced this situation or are experiencing it with your current financial professional, you very well may be working with a financial person more interested in sales than your specific financial situation.

What you really want to be looking for is an advisor that when you sit down with them the first time they have nothing on their desk other than a notepad or a laptop to take notes. The first meeting should be an interview for both parties to decide whether working together makes sense.

A financial advisor is going to ask a lot of questions about your personal situation. They will want to know what your personal goals and investment objectives are. They will ask questions like, how much risk are you comfortable with? Do you know your own risk tolerance? What are your goals for your retirement or specifically for this money? They may bring up questions about tax considerations and other pertinent information.

In fact, they will many times talk about investments generally but will not be specific. It will almost feel like a financial interrogation, but what that financial professional is really telling you is that they care about you. They want to know what you are trying to accomplish so they can help you get there. Most financial planners that are focused on their clients will not attempt to make a sale in the first meeting. They will be more interested in learning about you.

The reason this is critically important is because how can anyone realistically provide financial advice if they do not know anything about your personal risk tolerance, your financial goals and objectives, and applicable tax considerations? The answer to that line of questions is that is becomes very difficult to provide sound advice without first collecting personal information.

Your financial plan should be catered specifically to your situation. The cookie cutter financial plans or one-size fits all planning style is typically not personalized. Experienced financial advisors will be focused on you and building a plan around your goals and objectives. If you feel like you are being sold, you are likely in front of a financial salesperson instead of an experienced financial advisor or financial planner.

The first 10 minutes when sitting down with a potential advisor should help to tell you everything you need to know. A fast sales pitch, a hard pressure buy now before it is too late, or a pile of sales literature are warning signs that you could be in front of a salesman.

In the next blog post, I will cover the types of questions that a prospective client should be asking financial advisors they are considering working with. While the financial professional may ask you a lot of questions, there are a few questions that you as a prospective client should consider. Some of those important questions will be revealed in the next blog post . . .

To Be Continued . . .