The brutal truth is that most (i.e. 90%) of financial advisors provide no value. Don’t take that personally and don’t get defensive. There may be a breakthrough here that can make you very successful and turn you into a financial advisor marketing powerhouse.
I just finished reading a financial publication from the fall of 2008. The articles were absolutely worthless. One article said that REITS looked good (they are down 50-60% as I write this). Another article opened with a statement “mutual fund managers are cautiously optimistic about value funds.” Is that another way of saying “We are optimistic but if you lose money, we told you we were cautious.” Another article talked about how you need to educate your clients during bear markets and why this is such a good time to buy (the Dow was at 11,000, now 7300 2-24-09). I like to read old publications because you realize how valueless opinions are and how supposed experts know nothing more than lay people.
If you have been espousing your opinions and making forecasts for clients, you have no value because you have a 50% chance of being wrong. Forecasts and opinions are equally wrong by the brightest PhDs so please keep your opinions to yourself. If you’ve been telling your clients this is a great time to buy, you don’t know that. The Dow could go to 3000 or stay flat for 10 years. Sorry to tell you that those forecasts and opinions you have are worthless and potentially quite detrimental, but its not personal–ALL opinions and forecasts are worthless.
The other financial advisor value proposition often stated is helping clients stay logical and not get emotional about their money. If I were your client and I had just lost 50% of my portfolio, how much would I pay you for that hypothetical value of helping me stay logical or stick to my plan? I would have to say this assistance you provided had no value to me.
So before you go to work tomorrow or pursue any additional financial advisor marketing tactics, ask yourself what substantial value you can be–not that same old diatribe you’ve been telling prospects and clients for years. How can you actually deliver something that has objective, substantial financial advisor value?
Here are some possibilities:
1. Actually make people money in the market You won’t do that in the way you have been taught. Please read “How to Make Money in Stocks” by William O’Neil or “Beating the Dow” by O’Higgins to understand how money is made. Stop using funds and the other packaged crap that other financial advisors use. These packaged products are generally good for the manufacturer, good for the distributor (the BD), pay you good commissions and can be junk for the client.
2. Stop blindly listening to what you have been told like “buy and hold”, “you can’t time the market”, “diversify.” Have these “rules” helped your clients get rich or helped you add financial advisor value? Start thinking for yourself. Start reading voraciously. What really seems to work and not work. Develop your OWN philosophy and point of view and stop following the crowd. IN addition to the books above, read “What Works on Wall Street” by O’Shaugnessey.
3. To add to point 2, have an investing system for your clients like top producers do. For example, buy low and sell high. That means you need metrics to determine what is “low” and “high.” Or have a momentum system to buy or sell what is trending. But you must have a system or methodology as you cannot blow with the wind and sell what the next wholesaler recommends. I successfully use a very simple but objective system as explained in “Beating the Dow” which outperforms most mutual fund managers.
