Why People Don’t Trust Financial Advisers (and Used Car Salesmen)

Based on some recent experience I’ve had in trying to purchase a vehicle, I thought I’d spend some time on helping advisers new to the industry trying to build their businesses the right way. Additionally, it may help some advisors who are or were being taught the wrong way to deal with clients and prospective clients.

Perhaps this post will be better understood if I share my recent (and unsuccessful) experience trying to purchase a different vehicle. Over the last month I’ve inquired both private sellers and dealerships regarding certain vehicles they had for sale. Of the many features and benefits available, I’ve made clear (at least to the dealers) what features and benefits are important to me.

Like many car buyers, I am looking for good gas mileage, reliability, and affordability. What I am not looking for is pushy salespeople, sales pitches and closing techniques. Nevertheless, it’s what I’ve encountered at every dealership I’ve visited thus far.

Note to new advisors: Regardless of how you’ve been trained, people HATE to be sold. They also do not appreciate you being fake. They’ve heard all your sales lines and pitches and then some. Be yourself.

One dealership I called in particular asked for my name and information. I winced when they asked for my phone number, but reluctantly gave it to them anyway. However, I specifically requested that they remove my name and not call me for offers, deals, etc. Sure enough a few days later the bubbly receptionist who I made the request to called and completely ignored my request. In fact, she went as far as to only give her name (not the dealership she was with) and vague information on “some great deals’ they had going on. Another dealership ignored my specific request to use email only as I would be traveling. On their website they had a “preferred method of contact.” They never emailed but called me daily for 10 straight days.

Note to new advisors: If a prospective client or client makes a reasonable request, honor it. Furthermore, if a client has a preferred contact method, use it. Little things like this matter and will lead to more trust for the bigger things. Listen to what your clients are saying, don’t just hear them.

Naturally, I’ve done quite a bit of research looking at different vehicles and what I like and dislike about each one. Like many purchases in life there are trade-offs. Sacrificing a bit of gas mileage for an automatic transmission, paying cash for an older vehicle instead of financing a new one, etc. are all things that I’ve considered. The point is I came into the dealerships knowing exactly what I wanted. And yes, you guessed it, the dealerships tried to sell me something way off my radar. I’m all for being educated, but when you want steak and you’re being sold tofu – that’s a problem.

Note to new advisors: There is no one size fits all in financial planning. This means that one or two products will not fill every need. This applies to permanent life insurance, annuities, mutual funds, etc. Diversify your toolbox. You should have more than just a hammer. People also know more than you think and will surprise you with their level of knowledge.

Speak of the devil! As I’m writing this guess who just called? Yep. The dealership I specifically requested to not call me. I digress…

Which brings me to my last point; it’s more of a question really. If people don’t like pushy salespeople, product pitches and lack of professionalism, why do individuals and businesses keep doing it to their prospective clients? Perhaps it’s the industry. Many salespeople are paid based off of what they sell. Naturally, if they don’t sell, they make zero income. Compounding this is that many salespeople figure out very quickly which products and add-ons lead to higher payouts (commissions) and they tend to push those few products and services (a hammer anyone?).

These businesses would be better to rethink their approach and develop a consultative, educational approach to their prospective clients. In addition, they may consider adjusting how their salespeople are paid – weaning them off of commission only income and to more of a hourly or salary based approach. After all, it’s easier to worry and care about the prospect when one isn’t worry about their next paycheck.

Note to new advisors: Be extremely cautious of the phrase “unlimited income potential.” Your income is limited. If the income potential was unlimited, why did your manager accept his or her position? Why on Earth would anyone give up unlimited income for a salaried managerial position? Seek out positions where your income is related to how you help improve and bring value to a client’s life, not what you sell them. It’s a road less traveled, but worth the journey.