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How do you handle "financial advisers" when referred by friends?
Old 09-09-2014, 12:22 PM   #1
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How do you handle "financial advisers" when referred by friends?

I realize that FA is a dirty word around here, especially FAs whose fees are a % of AUM. I'm fully in that camp.

Much of my business comes from networking and word of mouth from what I like to call professional friends. Part of the quid pro quid nature of all this means that sometimes these professional friends need to bank their own goodwill by referring me or my business as potential customers to someone else. Sometimes these are financial advisers of one ilk or another.

Since I value my relatively small number of solid professional friends, I can't be totally brutal with these FAs like I otherwise might I used to like to spar a little with folks, but now my time is too valuable to waste on this. I'm sure I'm not the only one in this position. How do you handle it? More specifically, what is the best and quickest way to shut down an FA sales pitch without being unduly mean? I've found that saying something like "I believe that active funds and actively-managed portfolios don't beat simple indexing in the long run" a surefire way to prolong the conversation past my pain threshold.
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Old 09-09-2014, 12:32 PM   #2
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... I've found that saying something like "I believe that active funds and actively-managed portfolios don't beat simple indexing in the long run" a surefire way to prolong the conversation past my pain threshold.
Right, that will just engage them in their practiced sales pitch. Don't go there.

I think I'd simply be honest, which is best for them also, they won't waste their time either. Simple say " I manage my own finances, and I'm happy with that arrangement. If I ever feel I need your services, I'll give you a call."

If they persist, then they have opened themselves up to a little firmer reply, so I wouldn't feel bad about that. But if I'm afraid of offending other contacts, I'd simply reply, 'No thank you, I'm not interested at this time". And I'd simply repeat that again and again, nothing added, until they stop.

And if your other contacts ask you about the FA, you could just say something like "Oh, he sounded like a nice guy/gal, I just don't need their services at this time, thanks."

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Old 09-09-2014, 01:09 PM   #3
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I'd still have no problem just saying no under those circumstances. Networking is essential and you have to entertain referrals, but this is your money/financial security - you're not shopping for lawn services.

But if you can't just politely say no, why explain? There probably isn't an FA alive who isn't ready to field the passive/index "defense," that's just asking for the full sales pitch.

I'd just say you already have someone managing your finances (presumably yourself), and you just don't want to break the existing relationship. I am sure the prospective FA wouldn't want their clients to be shopping every other FA referred to them by friends/co-workers, I guess you could add that to slow them down.
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Old 09-09-2014, 02:30 PM   #4
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I'd just say you already have someone managing your finances (presumably yourself), and you just don't want to break the existing relationship. I am sure the prospective FA wouldn't want their clients to be shopping every other FA referred to them by friends/co-workers, I guess you could add that to slow them down.
+1. But don't get drawn into the discussion of what the advisor is advising.
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Old 09-09-2014, 02:33 PM   #5
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How do you handle it? More specifically, what is the best and quickest way to shut down an FA sales pitch without being unduly mean?
"I am comfortable and prefer to manage my own finances and do not require nor desire the services of a financial advisor at this time. Should I change my mind in the future, I will keep you in mind. Thank you!"

Repeat as necessary until he stops emailing, the phone call ends, or the topic of conversation changes.
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Old 09-09-2014, 02:52 PM   #6
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Your friends give you contacts to follow up on in your business and give your name to others as a sales lead/referral. Do you get dismissed by the friends' contacts when you call on them? I would respond to the FAs in kind. They see you as a referal, not a cold call, right? I think you do have to be a little nicer in dismissing them or you could jeopardize the chances of your friends giving you referrals, if that is that important to your business.
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Old 09-09-2014, 03:08 PM   #7
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You've gotten lots of good advice. My point of view is that no one can possibly expect you to use every professional to whom they have kindly referred you, and the FA's know that as well as anyone. They are selling something, and no salesperson expects more than a small fraction of cold calls to turn up leads.

In some ways, I wish I had your problem - not with FA referrals specifically, but I wish I knew people who could refer me to good, reliable lawyers, tax preparers and such. It is good to have these recommendations in one's hip pocket for when they may be needed.

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Old 09-09-2014, 03:20 PM   #8
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Great advise, your saving them valuable time by being upfront and not making them be uncomfortable by slamming doors. If you reverse the situation and dream(nightmare) your the FA, it would be great to have someone politly say no way, without giving anything to dispute.
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Old 09-09-2014, 03:23 PM   #9
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"I self manage our finances and get free advice from a close relative who is a senior level advisor with organized crime syndicate."
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Old 09-09-2014, 03:30 PM   #10
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Thanks for all the advice -- very helpful.

As Bestwife suggested, these are 100% more like referrals than cold calls. If one of my contacts puts me in touch with a potential customer, I expect that potential customer to give me at least a short but real bite at the apple. So it's only fair that the same would be expected of me when the situation is reversed.

I've got this exact situation coming up--having lunch with an FA via a referral from an important contact. Saying no would have reflected poorly on my contact. Plus, most of the circles I am involved in are more sophisticated than to come out and say I'm trying to sell you FA services. So I think the key is to be friendly but to not offer any argument/debate points.
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Old 09-09-2014, 05:18 PM   #11
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Here is what I use:

"Can I manage your investments for you?"

So far it has worked quite well. It's a good offense without being offensive.
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Old 09-09-2014, 06:39 PM   #12
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You might ask (or at least wonder) if the FA is so good at what they do, why is he/she still working for a living?
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Old 09-09-2014, 07:08 PM   #13
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I got offered free consultation at my broker. I told him I don't take advice but you can help me with the paperwork to roll my 401K over. He barely even tried to give me advice because I seem stubborn. He started to tell me I needed to look at maximizing SS and I told him I was going to apply to take on my ex's at FRA then switch to mine at 70. He didn't have an answer to that.
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Old 09-09-2014, 07:13 PM   #14
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I guess I have a different view of networking. I don't refer contact A to contact B unless I have cleared it with contact B first. If I had a contact that was either an FA or knew an FA and wanted to know if I had any contacts who might be interested, I would first check with my contacts to see if they would want that, and be sure to let them know there was no obligation on there part. I would not be comfortable putting a contact in the position your contact has put you in with the FA.
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Old 09-09-2014, 07:20 PM   #15
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I guess I have a different view of networking. I don't refer contact A to contact B unless I have cleared it with contact B first. If I had a contact that was either an FA or knew an FA and wanted to know if I had any contacts who might be interested, I would first check with my contacts to see if they would want that, and be sure to let them know there was no obligation on there part. I would not be comfortable putting a contact in the position your contact has put you in with the FA.
+1000

I just didn't understand this whole thing. Why would I feel obligated if someone effectively pushed a 'cold call' on me? What kind of people/contacts are these?

Like you say, if I knew a pro who could help someone who I thought might benefit from their services, I might mention it to them and let them call the pro.

It just sounds weird to me. Really weird.

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Old 09-09-2014, 08:34 PM   #16
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You've gotten lots of good advice. My point of view is that no one can possibly expect you to use every professional to whom they have kindly referred you, and the FA's know that as well as anyone. They are selling something, and no salesperson expects more than a small fraction of cold calls to turn up leads.

In some ways, I wish I had your problem - not with FA referrals specifically, but I wish I knew people who could refer me to good, reliable lawyers, tax preparers and such. It is good to have these recommendations in one's hip pocket for when they may be needed.

Amethyst
Like you I am all ears if friends mention they have reliable and competent leads for people I need (or might need in future). I am on the lookout for a good licensed electrician and also appliance repair (don't need them now but eventually will). I am all set in the accountant/tax preparer department and also HVAC, plumber, lawncare. I did get an electrician in for a minor repair on a friend's recommendation but he was so goofy I don't think I would have him back. She had warned me that he was "strange".
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Old 09-09-2014, 08:38 PM   #17
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I like the 'I have a long standing relationship with an FA who I am very happy with and would be loathe to break' while omitting that I was dancing with myself. I'd be tempted just to say something like 'I'm sorry I'd love to come over to you but every last cent I have goes to the amazing whole life policy that my FA set me up with 20 years ago.' My second go to might be that I'm flat broke. The truth is that I've never been approached by an FA.
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Old 09-09-2014, 09:35 PM   #18
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I guess I have a different view of networking. I don't refer contact A to contact B unless I have cleared it with contact B first.
I don't know all the details of your professional networking, but if someone from the network calls me without it being cleared in advance, I'm going to get in touch with whoever gave out my name and be very cross. That's NOT the way it's done around here. I might take the name and contact info for the FA and offer to pass it to people I think might be interested (and I would actually do so), but it's always up to the people in my network to make the call or not. NEVER would I give someone else's contact info to a FA or other salesman. Never.
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Old 09-09-2014, 09:45 PM   #19
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You've gotten lots of good advice. My point of view is that no one can possibly expect you to use every professional to whom they have kindly referred you, and the FA's know that as well as anyone. They are selling something, and no salesperson expects more than a small fraction of cold calls to turn up leads.

In some ways, I wish I had your problem - not with FA referrals specifically, but I wish I knew people who could refer me to good, reliable lawyers, tax preparers and such. It is good to have these recommendations in one's hip pocket for when they may be needed.

Amethyst
+1 Quite true.
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Old 09-09-2014, 09:55 PM   #20
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Try this one if they wont take "no" for an answer.

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