Financial Planner Secrets Part 2
A few weeks ago, I started a discussion of an article called "9 Things Financial Advisers Don't Want You to Know." In that first post discussing this article ("Financial Planner Secrets, Part 1") I spent a lot of time setting the record straight about the many fundamental assumptions that the author (and average consumers) make about financial planning and financial planners - assumptions that are misguided at best.
This time I want to focus on just one of the 9 things discussed in that article:
#4 - The Hard Sell Pays Off … For Them
"The hard sell and Doomsday talk are signals that something is off. “The financial planning process takes time and is ongoing,” Lemoine says. “If you’re pressed to do something right now, that’s a red flag,” Copelin says. One example is when a planner is pushing a product or service before you have even talked about your goals, Lemoine says. If you're told it's 'now or never' to buy into a stock or bond program, it’s probably a sign to walk away."
I agree ... sort of.
You are never done with planning. It is an ongoing process. Products don't solve problems. Products are like most medications. They mask symptoms (sometimes better than others), can be very expensive and almost never fix the underlying problem. Real Financial Planners don't push products.
But You Have to Start
Real Financial Planners push ACTION!
Results don't happen until you take action. Often, taking action isn't easy - especially if that action is different from what you're habitually used to doing. I also believe we should all be perfectly aware of what we're facing - the good, the bad and the ugly. Unfortunately, your brain isn't wired to see that truth clearly. Your perception is colored by past experiences and emotions, many of which are inaccurate. Taking action often requires a significant nudge.
The problem is NOT the hard sell here ... The problem is what is being hard-sold.
A Warning
If you were getting ready for a canoo ride on a lake, when would you like to know that a giant thunderstorm was coming your way? Before you get in the boat or when you're out in the middle of the lake like a sitting duck? Would you prepare differently or change your plans altogether?
Of course, you would.
The same thing goes in your financial life. There are going to be financial storms like those we saw in 2008. It is likely we'll see those again in 2012. Is this Doomsday talk? Yes, but if you take certain actions now you'll be much better off than if you wait until it's too late. Even if the bad stuff doesn't happen, being prepared will help you.
Process vs. Product
Want to avoid being sold financial products you don't need and can't afford? Get a Real Financial Plan. Having a plan will help you make better decisions about what you buy and why. It will help you understand when you are being "sold" and when you actually need some kind of help.
John