The Reverse Decision Tree
If you asked 1,000 financial planners, “What are the best steps for wealth accumulation?” you’ll get 1,000 different answers that all mean the same thing.
“Split your savings into short-term, mid-term, and long-term buckets. Then, save in all three.”
“Be sure to manage fees and have an advisor who works for you.”
“Make sure your portfolio is built around your risk tolerance.”
Or my favorite… “Start by putting your money with a company that has a proven track record of paying dividends.” (Beware…the life insurance pitch is locked and loaded!)
Each answer is just a description of the financial planner’s approach. In other words, they are saying “USE ME!"
It’s kind of like one of those decision trees -- where you’re given a starting point with two decision branches and each of those branches has another two decision branches, so on and so forth. But in this case, it’s all reversed. No matter what type of person you are, the financial planner finds a way to make it seem as though he “happens” to have the perfect solution JUST FOR YOU!
You see, the vast majority of financial planners, ranging from 30+ years in the business all the way down to the fresh-out-of-college kid who scored a 61% on his insurance exam, are trained to be experts of “language.” The elevator pitch, the intro, the hook, the redirecting questions, planting seeds of a given product in conversation, the referral language (or in some cases, the list they prepared from your LinkedIn) is all practiced over and over.
Like the Spartans taking their young through vigorous language training, financial planners are constantly obsessed with their language skills and how to illustrate their client’s rate of return against a benchmark that will always make them look like a genius.
Does that make them bad?
Some financial planners are really good at their jobs AND are sales language savants! (Bastards!)
The real issue is that language, and the art of giving the person across the table the warm and fuzzies, has absolutely zero to do with skills as a financial planner.
So where does that leave you?
I am not going to lie; I have no idea. A good place to start would be to look for whether your plan revolves around a particular product or proprietary funds. Second, put out the request that you see specific strategies to reduce income taxes, offset capital gains, or integrate with your estate plan.
If you get nowhere with these questions and the conversation seems to get turned back to either the product or your rate of return, you might need to go financial planner shopping.
Kingsview Wealth Management does not provide tax, legal or accounting advice. The information was prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors.