What Are Some "Tricks" Financial Advisors Play?

There are lots of “tricks” advisors can pull on clients. Let me share a few I have seen firsthand over the years. This is barely a one-minute read. 

First, we have the old trick of making a client “sticky.”

The short version is the more services you use from a firm, the harder it is for you to ever leave. 

Personally, if a client doesn’t want to work with me any longer, why wouldn’t I want them to be at a place where they are happy?

Another trick is how to answer the question of “What do I pay you?”

I’ve seen advisors who answer this question kind of sneakily by only quoting the fee they receive, not the total cost the client pays. 

For example, if an advisor works at a larger firm where their payout is 40% and the client’s total fee is $20,000, the advisor may just answer “You pay me $8,000.”

They just kind of ignore the other $12,000 of fees that go to the firm itself. 

Finally, the pressure request for referrals. 

It may start along the lines of “I get paid in two ways. One of which is the introduction to others like you. How about you give me three names?”

Referrals are fine, when earned. Using high pressure sales tactics to make clients uncomfortable to share a few names becomes a bit much in my opinion. 

There are many more I have seen. Feel free to send me any you were the recipient of. I always love to keep a log, but not to use!