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  • Writer's pictureBridget Sullivan Mermel CFP(R) CPA

Why Investments Smell

Why investments smell

Our fridge finally died; we could also use a new dishwasher. So, when we found that a local retailer was offering a discount for buying more than one appliance, my husband and I drove over.

I’m what the Kolbe personality profile calls a “Fact Finder,” so I had done my research. When we arrived at the store, I whipped out the print outs of the brand and models that we wanted.

We started with refrigerators. The one I had picked was okay, but there was a better one in a neighboring price range we both liked more that I hadn’t researched.

Then we went to the dishwasher I liked. Looked great. Then we talked to Pat, the salesperson.

Big news was the discount fine print (not visible on the ad or the in-store promotional material): to get the discount we drove an extra half hour for, the appliances had to be the same brand. The fridge and dishwasher we wanted were different brands.

Pat told us if we liked the fridge, we should just look at dishwashers from FridgeBrand. Wow, FridgeBrand’s dishwashers had so many features, it was unbelievable. From Pat’s presentation it was clear that it was a better machine and a good deal.

We told Pat we needed to talk to each other privately. Time for me to whip out my smart phone /information and fact find. Pat rolled his eyes. Was it because the store was closing or because of what I was going to find out? This is just the kind of mystery that I love to uncover. What was Pat thinking?

When my husband gave me a 3-minute warning, I spit it out. “With the fridge we like, just like all the fridges I’ve researched, 10% of the reviewers say the ice maker doesn’t work. Sometimes ice spills all over the floor in the middle of the night. One reviewer wrote a really vivid description!” I was going to continue when I looked at my husband whose look communicated, “the store is closed. It’s ten at night. Do you think I want to hear the vivid description of ice falling all over the floor?”

“In other words, the fridge is fine.”

He started walking toward the cash register. “Oh, and the dishwasher?” I said. He stopped. “Several reviews say it smells.”

“It smells?” he asked.

“It doesn’t clean well either. One person says the smell kind of goes away, but yeah, 10% of the people say it smells.” We don’t want a dishwasher that smells.


This got me thinking—how much would I have had to pay Pat to give me an honest opinion? I suspect that Pat knew reviewers say the dishwasher smelled.

As a fee-only financial planner, I put my client’s interest ahead of my own. I’m upfront about my fees.

What would it be like if I could walk into an appliance store and have it work like we operate our business?

How much would I have to pay to get the salesperson’s actual opinion and expertise? What would it be like if I could say to him, okay, here’s what, $100, $300 $500? Now tell me what makes the most sense for us. I’d really like to live in this world!


In the financial services industry, there are advisors, who, like Pat, make money based on commission. This causes an inherent conflict of interest. Commission sales people make recommendations based on their own agenda.

Just like FridgeBrand was offering some undisclosed incentive to Pat to sell their dishwashers, financial companies give advisors financial incentives to sell their mutual funds, life insurance, and annuities.

Unfortunately, a lot of these products smell.


There is another type of financial advisor, called “fee-based,” who charges the client a flat fee and gets commission from the financial companies. More smell!

Not only that, I believe the label “fee-based” was developed to confuse consumers into thinking that the advisor is “fee-only.” This kind of deception reminds me of the fine print that says—oh, yeah, and by the way, you’re going to drive an extra ½ hour for nothing.

Thankfully, the public is catching on. Just like the Internet has sparked reviewer sites like that report on the best products, there are a growing number of fee-only financial planners. Fee-only is still a small portion of the industry, but it’s clearly what consumers want.

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