Money middlemen will always try to impress. It is in their character and in the nature of their business. And almost always investors fall for middlemen who take pains to carry themselves in unique personal style. It pays to remember that personal finance is more finance than personal. Do not get sold by your money middleman’s deliberately showy external attributes – his couture, carriage, courtesy and coaxing words.
The Couture and the Cars
You cannot afford to forget that even money middlemen, the likes of banking, insurance and mutual fund distributors, can be imperfect. This is why you need to resist the temptation to measure your money middle man’s expertise by his personal effects like the four-wheeler he drives. Nothing is more perilous than falling for glitzy and glamourous money middlemen. You may already know that, but practising could be challenging.
It is important to understand that advisors and distributors of financial products are taught to impress their prospects. They are also taught to impress on their first visits. Creating a positive perception in the eyes of would-be customers is regarded as litmus test of a money-man’s ability to sell. The first things any prospect notices are their findistributors’ couture and cars. There are banks which instruct their direct selling agents to drive a swanky reputable brand and even help the latter get easy car loans from them.
Video Courtesy: YouTube/The Ramsey Show
Equally Target Upmarket Prospects
If your advisor is more interested in selling himself than the financial services he is supposed to sell, he is not the one for you. Find someone who can explain the financial product or service threadbare to you. Do not entertain the selling agent who is packaging himself and his product into a nice-looking lollipop. You fall for them and you will know you have lost your lolly. This is certainly an avoidable personal-finance mess.
Again, after a few months of buying a car, the financial advisor will be told to buy a more upmarket car. More Expensive? Yes, he is right there to see you sitting in that car. Do not worry, the advisor is acting as per his employer’s instructions. Sure, he has been suggested to target equally-upmarket prospects. This is something that happens too frequently in personal finance. Personal possessions are changed to suit the social standing of prospects.
Luring Away is Impropriety
Personal finance is more finance than personal. This is something the selling banks, insurance companies and mutual funds tend to forget all the time. Perhaps this is the reason why we see scores of investors saddled with mis-sold financial products. Many savers continue to crib about the compelled-products they are miserably living with. This is a tragedy, which defeats the two main purposes of financial selling.
One, the bounden duty of distributors towards material disclosures. Anything that is done to avoid candid disclosures and facilitate the sale of financial products is strictly outside his ethical remit. Even luring the prospects away from doing their due diligence and basic probing is financial impropriety. On the top of it, it is his professional duty to impress upon his prospects that they view personal finance matters through the prism of finance alone.
Respects Neither Work nor Money
Two, the distributors’ respect for other people’s money. Everyone earns money through hard work. Money does not come easily to anyone. Advisors and financial middlemen need to bear in mind that they need to be more careful, when it comes to dealing with other people’s money. Any middleman who is disrespectful of your money should not be trusted. Such a money middleman respects neither your hard work nor your money. Be wary of such black sheep who are financial narcissists.
Personal finance needs to be more about finance and its facilitating role in your future. And not about personal invitations to gala lunches and dinners. Your advisor-cum-distributor, who gives more importance to personal touches than professional knowledge of personal finance, may even send you a pre-printed invite with your name emblazoned. These are the marketing gimmicks you shouldn’t fall for.
Sharing Personal Preferences
As a smart investor in financial products, you should politely decline such invites. On the contrary, it is in your best interest that you should invite him over to your place for a simple and a modest, but a homely, lunch or dinner. That will bring you and the members of your family closer to the middleman. So close that the clouds of inhibition melts away and you can, along with your kith and kin, ask him pertinent questions informally.
You should be careful about not sharing your personal likes and dislikes with your advisor or distributor. He can always use this information as a prong for creating unique selling propositions that are non-financial. There is no need to tell him about the food you like, the cuisine you fancy, the restaurant that is your favourite and the drink you love. And if you do, be sure he does not use this info every time he wants to sell you a financial product.
Stories of Savers Coming to Grief
Do not ever go by personal appearances. Your advisor or distributor may sport a beard. Or, have long hair fondling his shoulders. He may wear gaudy clothes, which are not upmarket in your eyes. However, if he is good in making you understand the financial product well and making you realise its importance in your future, his so-called weird external looks are fine. Let personal finance be more finance than personal.
That is the bottom line. Looks and perceptions do matter, but only up to a point. Beyond which it is all packaging, more sizzle than steak. Ensure your advisor or financial middleman has all the answers to your probing questions and workable solutions to your nagging problems. Ensure he is not making up the answers. Stories of savers coming to grief just because they could not ensure this abound. Tales of investors losing their nest eggs too because of this are many.
Learn from your Distributor’s Failures
That brings this story up to address its central theme. Let personal finance be more finance than personal. Again, this tenet is a compelling reason to know from the horse’s mouth his own failures. Financial distributors too are human. They could have committed financial mistakes and lost money. So, it is equally important to learn from your distributor’s failures, as much as you can learn from his successes.
It is not surprising thus to find financial distributors and advisors too taking counsel from those they consider as their advisors. This is because money is more finance than personal, even if it is to do with one’s own personal money. Had it been the other way around, anyone would have needed scores of real-life examples, incidents from personal lives and case studies to convince the prospects to invest, say, in a mutual fund.
The MoneyMire’s Last Word
Offering such examples and case studies is a challenge in personal finance. This is because personal finance is more about finance and less about personal motivations. When personal finance stays away from such mires, it can be then tailored to suit every man’s needs. This is why even the most professional among financial middlemen seek the counsel of a better advisor for managing their own money. This is strange but true in personal finance.
