Talking For a Living

I have neglected my blog for several weeks while attending what I began to call Entrepreneur School. This is an excellent 2 week program offered only in Vancouver for professionals interested in starting a business in consulting or contracting. Fourteen participants, strangers at the beginning and a closely knit network by the end, work through a number of learning sessions facilitated by consultants who are specialists in various capacities. From marketing to public speaking, accounting to small business law, the sessions were of great value to all who participated. The only odd moments occurred when a consultant strayed away from their area of expertise, and began to pontificate on a topic which happened to be a specialty of one of the participants. The participant was uncomfortable because some of the information given was simply wrong. I began to wonder how many people are influenced by the actions of a consultant going off topic.

Consultants and investment advisors have a lot in common. Essentially they both talk for a living. Regardless of my job description, when I was an investment advisor, I talked for a living. I talked about the markets, the value of the dollar, housing problems, the U.S. deficit, Bre-X, Enron, Portus, whatever was in the news that affected my clients' investment portfolio. I talked so my clients could make an informed decision based on facts rather than emotions. Unfortunately, the investment road is paved with the broken dreams of those who were TALKED INTO bad investments (the emphasis is deliberate). You've heard the expression that certain things are sold, not bought? Investment products all too often fall into that category. When a fast talking advisor persuades you to buy something, there is often a greater advantage to him or her in the form of a commission or bonus. When an advisor patiently explains the product, outlines the negatives along with the positives, answers all your questions and avoids the hype, it may be a less exciting meeting but you can be sure they are trying to put your interests ahead of their own.

At the end of the day, I want investors to be comfortable questioning the advice they receive from any financial professional. Don't be arrogant, and please don't pretend to know more than you actually do. You are only fooling yourself. The financial professional is supposed to know more than their clients. I often tell my clients that I couldn't sit at their desks and do their job, why would I expect them to know more about my job than I do. However, I do expect you to question me on why I have made the recommendations I did, and to provide me with enough accurate and current information about your financial situation to be able to make appropriate recommendations. And if a financial professional ever starts giving you advice on, say, carpentry, please look for a new advisor!