Who should clients trust?

By Rodney Ballance

The Financial Leadership Academy


Surround yourself with people who are looking out for your best interests first. Those who are seeking to sell a product or a DVD are probably going to look out for themselves first and hope some of what they say can be helpful to you.

I recently spoke at a university in North Carolina, where I was fortunate enough to meet some wonderful people hoping to learn more about how money actually works. I like to have a good understanding of my audience when speaking, so I asked some questions of individuals before the event.

The one recurring thought I heard as I opened the meeting was that people are not sure who they should listen to about financial issues. Some attendees stated they are so confused by all the different strategies and theories these days they’ve just stopped doing anything.

I feel their pain and offer this advice for any of you who also share this frustration. Sometimes it’s not a bad idea to sit on the sidelines and catch a breather. As my high school basketball coach used to tell me though, make sure you keep up with what’s going on in the game while you catch your breath.

Take the time to seek out competent advice from people you can trust. Here are a few things to look for during your screening process.
    1. Make sure the person you look to as your primary source of information actually has a license that allows them to work in the financial field. You’d be amazed at some of the people who have bluffed their way into the media, churches and your homes who don’t even have licenses to discuss the financial issues for which you’re entrusting the rest of your financial life.

    2. Are they asking you what your goals are, or are they telling you what you need to do to be successful? A fraud will convince you that you have to reach a certain goal because that’s what everyone else is doing. There are realistic goals that require actual planning, because everyone’s situation is a little different. Your real goal might be to add a new deck on your home, or to buy a home or have an adequate retirement income. Whatever it is, don’t let someone else sell you their goals.

    3. Have they worked with people who have accomplished what you want to accomplish? One telling fact that will prevent you from falling victim to a fraud is by learning about others who have followed the advice of this person who shared the same end goal as you. For example, if you were building a stone wall, wouldn’t you like to see a similar wall the stone mason had built for someone else before you commissioned him to do the work for you?
    4. What does this person sell? It is imperative to know what products this person actually sells before you agree to buy anything from them.

    For example, if you walk into the office of an investment firm and tell them you want to plan for retirement, I guarantee they will tell you to invest in something related to the stock market. They’ll tell you it’s because "these products offer tax deferred growth, or they’re the only financial tools that outperform inflation”, according to them.

    The truth is that there are many financial tools that offer tax deferred growth with a tax free distribution, that historically also outpaced inflation. The investment guy probably won’t make as much money if they sell you one of these tools, so they go with the obvious. I’ll address this thoroughly in a future article.
These are just a few examples of ways you can protect yourself from people who just want to sell you something. Find yourself a fee-based financial advisor who isn’t trying to sell you anything. If you are buying knowledge, they shouldn’t be selling you product.

I’ve said a thousand times that the most precious commodity in the world today is knowledge. Winston Churchill once said, “If you have knowledge, let others light their candles with it.” I believe in this philosophy, and have operated my practice on it for several years now.

If there’s one thought I’d like to leave you with in this article it would be, surround yourself with people who are looking out for your best interest first. Those who are seeking to sell a product or a DVD are probably going to look out for themselves first and hope some of what they say can be helpful to you.

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