SECRETS OF A FORMER FINANCIAL ADVISOR: DANCE WITH THE ONE WHO BRUNG YOU

“Dance With The One Who Brung You” – Old Southern Saying (with various ungrammatical variations). Source: NLG


“A man with a watch knows what time it is. A man with two watches is never sure.” – Lee Segall


Here’s a hypothetical client conversation (exaggerated because I find it funny to do so) that has happened to me, and likely every other agent and advisor who has been in the business for a while:

Clients: “Hi Joe, thank you for driving 3 hours to meet us in our home at 8:00 pm for our annual meeting! Would you like some coffee?”

Agent: “Hi Mike and Cathy, it’s nice to see you again! I should probably pass on the coffee. Tell me how have you been?”

Clients: “Well, we’re very excited to tell you something. Do you remember the last time we met for four hours to go over our entire situation, and all of your recommendations?”

Agent: “Like it was yesterday.”

Clients: “Then you’ll be happy to know we took your advice on the life insurance. When we met with [insert competitor name], he said it was good advice, and we bought life insurance policies on both of us, and the children.”

Agent: “I really am finding it hard to find the words to tell you how I feel about that…”

Clients: “See–we knew you‘d be pleased!”

Are you diversifying your financial advisors? Is that smart?

Diversification is a good thing…up to a point. We all know that diversification means “not putting all your eggs in one basket.” Why? Because if you drop the basket with the eggs in it, there goes your breakfast. When we talk about financial services, we usually think about investing when we talk diversification. The most extreme example is rather than putting all of your retirement money in your company stock plan, you put some of your money into other investments in case your company turns out to be the next buggy whip manufacturer.


However, we can take diversification too far. How many different doctors do you want treating your heart condition? This is especially true if they don’t know about each other, and are all prescribing different medications. That’s a recipe for disaster. The same can be said for your financial advisor. Are you diversifying your financial advisors, and getting multiple “prescriptions” from them? If you trust your financial advisor (who likely knows more about you and your finances than your mom, your best friend and your dog combined), is there a benefit to getting conflicting advice from someone else? Have you asked your advisor what other services they offer besides what they’re managing for you?

That’s not to say that there might be a legitimate need for a second opinion. I’m not suggesting blind faith. If you have concerns about the advice, the relationship or the outcome that aren’t being resolved, seeking a second opinion is the responsibility of being a good consumer. The assumption though is that you’ve done your homework in choosing the financial professional that you’re working with. A good advisor wants you to talk to them about any concerns you have. They want you to be educated, and an active participant and decision maker for your financial future.

No One’s Asked You to the Dance Yet?


Don’t have an agent or advisor yet? You should always do your homework when finding a financial advisor, the same as any other professional relationship. Ask people you respect for referrals. Do some research into their background and credentials. If they’re registered to offer securities, you can run a free broker check at FINRA.org. If they have an insurance license, there may be information available on your state’s Department of Insurance website. Don’t ignore your gut instincts either–your initial meeting is important and likely to set the tone for your relationship. If you have any misgivings, it’s not a good idea to go forward.

We also know a few great advisors we’d be happy to recommend!

Have an agent contact you

Mark Bates is a Registered Representative and Registered Principal of Equity Services, Inc., Member FINRA/SIPC. Equity Services, Inc. is a registered broker/dealer affiliate of National Life Insurance Company, Montpelier, Vermont. Securities can be offered solely by representatives registered to offer such products through a broker/dealer. Financial planning and investment advisory services can be offered solely through investment adviser representatives of a registered investment adviser.


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