The Five Steps “Say Anything” Advisors Use to Get You to Buy Products You Don’t Need

Consumers don’t know who to trust in the financial industry and the recent re-combinations and melt-downs haven’t helped. I look at how advisors operate on a continuum with two extremes: The Say Anything Advisor, and the Honest John.

The Say Anything Advisor

For the Say Anything advisor, the key goal is making the sale. Here are the five easy steps:

1. Gain trust by listening carefully to what a prospect says
2. Pick up on a prospect’s biggest fears
3. Harp on the fears
4. Offer a solution to the fear that entails using well-researched buzz words that appeal to a prospects emotions
5. Sell the advisor’s products.

Here are some common fears and corresponding buzz words that Say Anything advisors use to hook people into buying products they don’t need:

Buzz Words of the Say Anything Advisor:

Prospective Client Fear
Buzz words to hook you into the “Solution”--repeat often!
Reality behind the “Solution”
I’m paying too much in taxes
Tax loophole
Tax haven
Tax savings
Tax free
Low or no return mutual funds that are only appropriate for the top 1% of taxpayers
I’m might get sick and die

Take advantage of being healthy now in case you can’t get insurance later

Protect your “loved ones”
Life insurance that you don’t need
My investments aren’t returning as much as they could
Beat the market
Outperform the market
We can do better
Overly complex “investment strategies” that seem to go in one direction--down.

Some organizations focus on training Say Anything advisors and developing products to cater to the Say Anything Advisor side of the continuum. MorganStanley SmithBarney, Northwestern Mutual Life: I’m talking about you. I have met some Honest Johns among your ranks, but not many.

What the Honest John Advisor will say

On the other side of the continuum is the advisor I call the Honest John Advisor. The Honest John Advisor follows the following protocol:

1. Gain trust by listening carefully to what a prospect says
2. Pick up on a prospect’s goals
4. Offer solutions that help the client accomplish their goals that entail using well-researched, low cost strategies that take some effort to implement.
5. Help the client implement the strategies.

Strategies of the Honest John:

Prospective Client Fear
Solution proposed by the Honest John Advisor
Additional Comments
I’m paying too much in taxes
Have a qualified professional review your tax returns and see if they can offer suggestions on how you can save money.
Often you can employ strategies retroactively and file amended returns. Also looking at your tax situation in advance often helps know what tax strategies to employ in a particular year.
I’m might get sick and die

Live life to the fullest now! Get life insurance if you have dependents.
Most people don’t need life insurance, but if you do, low cost term is generally available.
My investments aren’t returning as much as they could
Nobel-prize winning research indicates that you can’t beat the market and that relatively simple investment strategies yield the best results.
Your money is better spent getting comprehensive advice rather than overly-complex investment advice from advisors trying to justify their fees.

by Bridget Sullivan Mermel