Coming into financial services through a life office "sales force" put me in front of managers whose mantra was "see the people, see the people, see the people". Not knowing any better that's what I did, and every so often I was rewarded with a client where I would earn a large commission.
So large it paid for the time wasted mining the dross that I had cajoled into making (and keeping) an appointment, except that it wasn’t wasted time because every “no” took you closer to a “yes”, or so the mantra goes.
I guess this business model is still prevalent otherwise why else would bond commissions still hover around the 7% level? This idea of enticing people across the threshold with something for nothing, a free financial health check for example, is a flawed model, it always was and actually does more harm than good.
“See the people” is so engrained in our psyche that I find myself continually struggling not to agree to meetings, always leaving the door ajar, just in case. This open door attitude merely invites freeloaders to contact us for an “initial consultation”. Stating the first meeting is “at our expense”, rather than free, doesn’t really register with the fruitcakes who believe we really do work for free.
Even our supporters and allies at IFA Promotion believe that we’ve got to hook people by giving something for free. The “unbiased” website allows people to print off a voucher for a “free financial consultation”. Well I’m sorry but I think it’s time for a change.
And before anyone thinks I’m “having a go” at unbiased, I’m not, I have had a small number of very good clients thank you very much. And yes, when I measure the fees earned against the costs of listing on unbiased the math works.
What this doesn’t show is how much time is wasted on the voucher waving freeloaders wanting a free meeting. When I see a voucher my heart sinks. These people do not want to know about me and my firm, instead they want an instant answer to their problem, and they believe it’ll be free!
We’ve got to dispel the myth that there is any such a thing as free advice or a free financial health check. The value actually sits within the advice and analysis that so many people seem to think is free. Free consultations, they should be consigned to history.
Dennis Hall is founder of Yellowtail Financial Planning.
The views expressed are those of the author and not those of the company he represents.IFAonline
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