Regulate the industry salesperson, says advisor

Regulate the industry salesperson, says advisor

Regulate the industry salesperson, says advisor This week’s article stating a product pusher is not a ‘real’ financial planner had one advisor pushing, herself, for more government regulation on the industry ‘salesman,’ making it the Comment of the Week.

The article featured commentary from wealth management director, Fausto Pastro of William Buck – an award-winning network of financial advisors and accountants –  who said that the greatest hurdle financial advice is facing is the struggle to migrate away from an industry with a ‘salesperson’ approach to a real profession – separating the delivery of advice and selling products.

Kathy Waite, a fee-for service, net-worth manager based in Saskatchewan, agreed calling the article ‘well-summarized,’ wadding that the pressure from product providers often overrides the advisor’s good intentions.

“Most folk in the "industry" have good intentions and would like to be perceived as "professionals" hence the myriad of titles on business cards,” she commented. “…but the pressure from the product providers is intense.”

In the article, Pastro called for enhanced education for financial planners, while Waite’s feels more regulation would weed out the ‘salesperson’ from the true professional, who has the client’s interests top of mind.

“I think the government should directly regulate insurance and investment sales people. Having to be sponsored by a product provider for a life license is a joke,” she wrote.
“Immediately you get a target and are expected to sell your sponsor's products first.”

What are your thoughts on product sales versus providing advice? Tell WP your thoughts in the comment box below.

Click here to read the full article.
2 Comments
  • Harley Lockhart CFP CLU CHFC 2014-03-31 2:27:45 PM
    I question the ability of any government regulation to increase the professionalism of financial advisors. Regardless of the compensation method, the attitude of the advisor is the key to being professional.

    In BC, no company sponsorship is required to obtain a life license. It has been my experience as an independent that no company (I have contracts with 14) has provided any pressure to sell their products.

    The companies provide education on their products, how they may benefit clients and how to effectively present the information in meaningful terms to the client. Most (maybe all) companies provide conferences for top producers to encourage sales of their product. The choice to allow that incentive to impact your attitude toward sales is solely up to the advisor.

    On the other hand, I surrendered my Mutual Fund license about 7 years ago because of the pressure from my dealer to increase sales to retain the relationship. Changing dealers did not resolve the issue.

    Selling has been erroneously presented as a lowly, abusive occupation. In truth, good selling is very honorable. A good salesperson helps the customer understand what they really want and suggests a product(s) that best satisfies that desire balancing the advantages and disadvantages--no pressure; no manipulation. Remember, NOTHING happens without a sale including your acceptance (successful sale) or rejection (no sale) of these comments.
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  • John K 2014-04-07 5:20:16 PM
    I think Harley's answer to this article hits the mark. I have been in the business for 34 years and have felt no pressure to sell any specific product. It is very tiring listening to people trying to bash the industry and advisors.
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