Coffee With Mike – Distinguishing Fiduciary From Sales

Q:  I thought we could talk a little bit about fiduciary advice versus just being put on a sales track.  How do you know if you are being left in the dark? How do you make decisions when you feel that way, and what can you do about it?

 Mike:  It is really hard for people to walk away.  When you feel like you are being “sold”, you need to step away.  A lot of us are afraid to offend people, even people we have just met, and as a result of that, we end up putting ourselves in a situation where we have to make difficult decisions.  Not so much about what they want us to do, but how do we get out of this.  I don’t know if you have ever been in a conversation with someone, and you go “Oh man, how do I get out of this one?”  But a lot of times, it happens, when you seek advice and you find out that you are really meeting with the wrong person.  

Here is the #1 key for me about “am I meeting with the right person?”, and that is that I really don’t know enough about what it is I need to decide.  So, I have sought out someone to tell me what I need to know.  And if they start talking to me about buying things before I really understand what my situation is, if I feel like I am still in the dark about what I need to do, and I am just listening to someone tell me about what they do, then I think that is probably a sales track, and not someone that is trying to help me with advice.  That is what I think a lot of people get stuck in.  

And I think the other side of that, you know, the person who is in the sales position?  They get stuck in that, too. Because maybe their lifestyle, their whole livelihood is really on generating commissions, and as a result of that, it puts a lot of pressure on them, and they want to get to that part of the conversation as soon as possible.  Maybe subconsciously, or unconsciously, they are skipping over that part, and they don’t mean to.  So we need a partnership here.  Like, right now, I am kind of monologuing with you, but I want a conversation with the person I am seeking advice from.  

Q:  So what can people do if they feel that their advisor is kind of skipping over those parts.  What can the average person do to quell against that?

Mike:  Just hold your hands up and literally say “whoa whoa whoa!  Let’s just stop about what you are talking about and let’s get back to why I came in here, because I feel like we have gotten away from why I am here.  I am here to get educated.  I would like to understand what it is I need to know, and then whatever it is I need to know, I would like to make a decision based on that.  If there is a solution you offer, then great – I am all ears about that solution.  But not until I understand; not until I know what it is I need to know.”  

I think that the sales track that too many industries provide their professionals intentionally leave the customer in the dark.  It is like you are sitting in a room, and they turn out the lights and they close the door and there are no windows, and then every once in a while, they speak through a loudspeaker and they say something like “hey, you are okay” or “hey, you ought to do this” or “hey, you ought to get that” or “hey, you ought to give up doing that”.  Whatever they say through that loudspeaker is all you hear.  But you are still in the dark.  You have no idea where you are emotionally, or financially, or strategically.  You have no idea where you are, and you are trying to figure a way out.

The person who actually turns on the light, who actually opens the door, who actually pulls up the window shade, and by golly, there IS a window in here!  You can begin to see where it is you are, what it is that you need to be thinking about, and what it is for you personally that makes you feel better.   That you know, if you do this, that this is what is going to help you not only move forward in whatever it is you are trying to decide, but you are going to feel good about moving forward.

I think this is where you can tell the difference between what is a sales track and what is fiduciary.  A fiduciary is going to find out what is in your best interest.  A fiduciary is going to help you connect with that emotionally; it is going to resonate within you, and then you are going to have enough information where you see the alternatives, and you are going to be able to make a decision that is best for you and your family in that situation, as opposed to just some generic thing.

I think that is the difference.  You are taken out of the dark and you are put into the light, and you can see what it is that you need to do.

Q:  So, if you are getting advice based on your values, your goals, your dreams, then you know that you are being given fiduciary advice, versus just a generic “I am just trying to sell you this product and make my commission, and send you home.”

Mike:  Right.  And it is an expression of values also.  The salesperson has their set of values.  If you start listening closely, they may start talking about what is important to them, as opposed to what is important to you.  And again, unintentionally, or perhaps intentionally, that begins to cloud what you are supposed to do for your family.  What you are really hearing is what he or she needs to do for their family.  That is really the dividing line between being on a sales trace or a fiduciary track.  Is it best for you or is it best for them?  Listen closely, and you will be able to tell.