Tricks of the Trade

Financial Plans, or Retirement Plans, are typically completed using a software program.  An adviser meets with a client, reviews their situation, collects the information relevant to the plan, and then runs the analysis.  During the process of “running” the analysis, there are normally some features of the system that the advisor can adjust, such as the inflation rate, savings rates, etc… This process produces the plan.  The advisor then delivers and reviews with the client.  By and large, this is how it is done in most situations.

None of this is necessarily surprising or unusual.  However, you might be interested to know how we were trained at my prior firm. We were instructed, as we communicated with clients, to let them know that we were working on their analysis for a week or two – even though it was basically generated immediately.

The idea was to create the impression that there was a huge commitment of time and resources to this process, that we were working hard on their personalized analysis, in spite of how simple it really was.  Instead of simply being honest with our clients about what we provided, we had to mislead them about the process to create value.  In addition, once produced, we were taught how to sell the company’s products from specific pages of the report.

Unfortunately, I think too many ploys are used to help advisors and investment firms create perceived value instead of real value.

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