3 Types Of Financial Advisors
After reading Michael’s comment on my first post on Primerica, I realized that I should bring another point regarding personal finance companies. While I still do not think that Primerica is being honest with its marketing, it does not mean that all their financial advisors are crooked. On the other side, financial advisors working for other companies may not be as good as you think they are. I have been working with hundred of consultants working for a dozen different companies and I established three categories of financial advisors. |
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| Clowns
Yup, you read it right. The financial industry is full of clowns! Clowns are individuals who has no financial background and do not understand products they are selling. Since they do not know what they are doing, you better be careful giving them money to manage. You are asking me how come there are so many of them? Simply because anyone can become a financial advisor within three months! |
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| he best way to recognize them is to read about a specific topic in finance and then asking them question about it. If they what they are saying does not make sense whatsoever, you have a clown in front of you. | |
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Car Salesman
I feel sorry for the (four) honest car salesmen on earth but they did not get a bad reputation for nothing ;-). Seriously, the financial industry is also full of salesmen that are looking to make the biggest commission out of their meeting. They are nice, polite and full of confidence. Therefore, you will feel satisfied dealing with them and you will be under the impression that they are doing the best thing for your (theirs) finance. |
| Some salesmen are still good financial advisors since they can have a team that are building the financial plan behind them. They most likely are the best performers of their region. If you feel that you are dealing with a salesman, make sure to meet his assistant, associate and other member of his team. Never forget that he is in to make money, if he has a bad team to support him, you will end-up with a bad financial plan. | |
| Financial Planners
Yes, there are some good financial advisors out there ;-). While the title “Certified Financial Planner” (CFP) is not a guarantee of results, this is the only category of financial advisors that had to write exams that goes deeper than the stupid mutual funds or insurance licence. However, when I am talking about financial planner, I am not really talking about the title but more about the way they handle things. |
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| A financial planner will look at all the aspect of your personal finance (estate, insurance, investment, taxes, debts, etc.). He will help you out building a plan according to your needs and your goals. He will also provide useful advice and knows what is going on in the financial industry. This is a financial planner. | |
| I must say that overall, there are a lot of clowns, some bad salesmen and a few good of them and very little financial planners. In my province, the government and the Personal Financial Planner association are working together to create an official standing for Personal Financial Planners. They want them to be recognized at the same level as the notaries, lawyers and other professions. Hopefully, many other governments will go this way in order to insure a minimum of professionalism to the population. | |
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You only...
December 17th, 2007 at 9:29 pm
Does your province not have investment counsels?
December 17th, 2007 at 10:43 pm
TMW, they do, why?
There are a lot of people that are dealing with clowns and car salesman and they will never notice.
You also have to take in consideration that even if a financial advisor goes as bad as being guilty of a criminal fraud, he will not get more than 5 - 6 years in jail in my country…. That’s very sad!
December 18th, 2007 at 10:14 pm
great post! I’ve spoken to so many people in my money coaching role (I’m not a financial planner! I just help people get their cash flow issues in control) who have felt the way people feel after buying the used car. I hope as the cdn pf blogger community grows, and people read them, more and more cdns will become informed enough themselves to swiftly distinguish between the categories. (how’s that for a lofty goal?)
December 19th, 2007 at 1:19 am
Lol - some great ideas in this post. I think I’ve met a bunch of clowns…
December 19th, 2007 at 11:59 pm
No kidding! There really are those out there, and I’ve only met the first 2! That’s why I decided to take the investment front on my own. It is not rocket science and well worth it since it is YOUR money. Nice post -
December 24th, 2007 at 11:54 am
[...] 3 Types of Financial Advisors @ The Financial Blogger: The Financial Blogger has categorized some financial advisors into three buckets: clowns, car salesmen and financial planners. If you’re looking for professional help, be sure you hook up with the right type of advisor. [...]
April 17th, 2008 at 2:50 pm
I went to one of Primerica’s “interviews” or as I would call it a sales pitch. 1) The example they used was of a home with (around) 60,000 in equity in a home that they have had a mortgage on for 5 years. (I want to say that the home value was 220,000 and they owed 160,000). If I could find homes like that I wouldn’t need a job with Primerica or anyone for that matter.
The fundamental point of Primerica is that people who have not saved and live beyond their means through credit card debt are responsibile enough to invest the savings of a term policy. A term policy was unfortunatly not described by them to the gerbils in the room eating it up.
June 26th, 2008 at 6:02 am
[...] From time to time, I receive emails from readers asking me questions about their financial situation or about some wicked investment strategy designed by a financial consultant. I noticed one common thing; they have no clue if they can trust their financial advisor or not. I guess this is probably why several people are trying to manage their money on their own since we are surrounded by a bunch of financial clowns! [...]
July 4th, 2008 at 6:00 am
[...] are things that should be done by a professional. The problem is that our industry has too many clowns and car salesmen in their rank. It is your challenge, as a customer, to find the right consultant that will bring [...]
August 10th, 2008 at 7:53 pm
[...] they are more likely to hire car salesmen than real good financial agents. In addition to that, there is a huge part of the pie taken by [...]