Four Ways To Fortify Your Sales Resistance

How can you create your own financial B.S. detector?

According to the U.S. Department of Labor, investors pay unnecessary investment costs to the tune of $17 billion per year.

This wreaks havoc on retirement plans which leads to many unpleasant side effects.

Don’t be a patsy for persuasion.

Learn how to ask the RIGHT questions and avoid financing a salesperson’s retirement rather than your own.

We recently came across a brochure from a large insurer, delivered by someone who recently left the dark side of finance. It described proven methods salespeople use to sell high-cost annuities to uninformed teachers and others.

This data was constructed from “proprietary methodology instant response dial technology to measure real-world reactions to potential message articulations.”

How about having your retirement portfolio chosen for you in this manner? Proprietary methodology and exploitation are synonymous in this instance.

This approach is light years away from client-centered, evidence-based investing advice.

The tips and guidelines for commissioned salespeople were simultaneously appalling and frightening.

While this brochure concentrated on teachers, the methods described are commonplace for too many in the industry.

Years ago, a book was written by Mortimer Adler called, How to Speak How to Listen. Adler provided four excellent questions to deflect predators from stealing your money or persuading you to make bad decisions

#1  What is the speaker trying to sell, or, in other words, what is he trying to do or get me to feel?

The brochure talks about creating an emotional connection with the prospect. “Tell a personal story about a family member who is a teacher or a child who goes to a public school.”

Investors need to understand this manipulative behavior and separate the “nice guy” aspect from the mission. The goal is the best retirement option, not to make a pseudo-friend.

#2  Why does the speaker think I should be persuaded by this appeal? What reasons are offered or what facts are presented in support of this appeal?

The brochure talks about annuities as guaranteed protection. It emphasizes safety and security. Data shows teachers are a more conservative lot, so why not give them what they want? In this case, the “facts” don’t support the appeal. Financial advisors should provide their clients what they NEED, not what they WANT. This document is using data to make a sale, not provide a sound retirement plan. Excessive fees and low returns are a high price to pay for perceived safety and security.

#3  What points that I think are relevant has the speaker failed to mention? What has he failed to say that might sway me one way or the other?

How about that the fact that salespeople are encouraged NOT to introduce products by name? Annuities are referred to as “protection options.” The salesperson is pushing a one-product solution to every prospect he encounters. If every problem is a nail, every solution needs a hammer. This is a major red flag.

#4  When the speaker has completed his persuasive effort, what questions of significance to me has he failed to answer or even consider?

Where do we start?

How about nowhere in this brochure is there any mention of the price tag of this wonderful product? While touting “its adaptation to changing needs” it fails to mention the hefty surrender charges if things actually do change. How about the basic concept of risk vs. reward? For every guarantee, is there not a price?

My personal favorite is: salespeople are encouraged to tell teachers that their K-12 public school 403(b) is “like a 401(k).”

“Like” implies the same and there is a glaring difference; 403(b) plans are non-ERISA and the employer has no obligation to screen investment choices based on costs; that is not exactly a small fact to omit. In other words, “like” is defined as playing under a completely different set of rules.

Heed the advice from Mr. Adler. “If on one or more of the foregoing counts, the speaker has failed to satisfy you, so that you are left unable to answer these questions or are left in serious doubt about what the answers are, you should remain unpersuaded.”

Protect yourself by getting the right answers to these questions before making any decisions regarding your retirement account.

If you don’t ask these questions, who will?

We have no problem answering them.

Does your current advisor?


Source: How to Speak How to Listen by Mortimer J. Adler


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