“I sold this mutual fund, so when am I getting paid for it?”
This is how many of my conversations start with the financial advisors at the not-to-be-named financial company I work for.
See, I have one of those 9-5’s where I help financial advisors figure out what the hell they are doing. I make a decent amount of money. I push keys on the keyboard and push paper here and there. Nothing to be overjoyed about, rather just enough to help me pay the bills, save some dough, have some fun, and start building my empire on the side.
This story isn’t about me though. I am just a guy trying to build an online empire in something completely different than finances while working in the financial world. This story is about your financial advisor who calls at the end of the month, every month.
Let me preface this by saying the large brokerage firm I work for has been named one of the “Highest in Investor Satisfaction with Full Service Brokerage Firms” and is known to be a great company to work for industry wide. I say this not to impress you, but to let you know that these surveys don’t tell the whole story. They sugar coat it and this is of one of the top firms. Who knows how uninterested in you the lowly ones are.
Now, I don’t know about other firms, but I have heard it is fairly cut-throat. The quotas can be ridiculous in the financial world and that is just the beginning of the story.
Stop for a moment… Read that last sentence one more time. Did you catch yourself understanding how hard it is to reach goals (i.e. quota’s) established by a boss? Or did you catch yourself saying, “What the f***? Quotas?”
I am fairly confident many of you know that financial advisors have quotas. However, many of the people I know seem to disregard this fact. To make this clearer, let me state it boldly…
Financial advisors are in it for themselves… and then maybe for you too.
They have quotas to make. They have bonuses to earn. They have all of these incentives based on how much they can sale. Yes, they are sales men and women. Do they care about your well-being? A few might. If they have a well-established business, they will care more for your well-being because if you don’t buy $100k in stocks, bonds, or mutual funds this year, someone else in their book of business will and they will still put food on the table. What it all comes down to for financial advisors is that they are in it for themselves first and you second.
This is where financial advisors jump on my ass.
I don’t blame them though. They are just supporting their families and living the life they believe in. I mean, how hypocritical is it for me to work for a financial firm where the FA’s indirectly pay my bills? Along with that, this is not specific to my firm. This is rampant to any and every financial advisor and sales person in any and all industries. Whether they are selling knock off Louis Vuitton shades or fixed equity index annuities, they are still selling something to get something from you.
What I am trying to bring to the forefront of your mind here is that no matter what your current financial situation, no matter how much you think your neighbor who manages your finances, or how awesome those bags of crap you receive with the financial firm’s name all over it, YOU are still the only person responsible for and reliant on your financial future. We, including me, should not just point the finger at the guy selling the shit as much as at ourselves for being stupid enough to think we couldn’t ride this crazy market just as well as the financial advisors (See these monkey financial kingpins for proof).
Financial advisors have their place. You wouldn’t believe the financial ignorance of the people I even work with let alone those graduating college that have no idea what a mutual fund is, let alone how to balance a budget (P.S. I used to be one of those idiots until I decided I wanted my control of my financial future). My wife is amazing, but she cannot handle the swings of the financial market. For her, a financial advisor would be absolutely necessary otherwise she would put everything in a savings account making 1%. Luckily she has me. :) Ignorance breeds opportunity for others to “take care of it” for us. That is also known as charging endless fees to manage your money with no guarantee it will actually grow.
At the end of every month, I am extremely busy at work. The only reason I am busy is because there is a commission cutoff the last week of every month (This is common practice industry-wide). The financial advisors have until that day to “earn their paycheck” that comes on the 1st. Without fail, they call in like madmen looking to buy, sell and everything in between to boost their paycheck before cutoff. Then the cutoff passes and the phone lines become less busy and the world is centered again… until the next commission cut off.
Leave this article with two thoughts in mind:
- What small bit of information can you learn today to improve your knowledge of the financial world?
- Always question if your financial advisor is calling you to help YOU or THEMSELVES.
Financial advisors do have hearts. Sometimes, their paychecks just prevent them from using it.
Guest Post by a reader who asked to remain anonymous. For obvious reasons ;) What do you all think of this? Have you come across any SHADY or even GREAT financial advisors in your past? I know there are a ton of good ones out there, just sometimes hard to find… making referrals very important! (Here’s a good one in the DC/MD/VA area if you’re looking: Divergent Planning. They focus on Generation X & Y, and are pretty cool people.)
(Photo by pommes79)