“A-B-C. A: Always. B: Be. C: Closing. Always be closing, always be closing.”
So go the not-so-gentle words of wisdom from Alec Baldwin's character in Glengarry Glen Ross. In the movie, Baldwin is trying to light a fire under a group of underperforming real estate salesmen, but, if personal experience is any guide, he could just as well be a trainer for certain brokerage operations.
Like most brokers, I participated in a training program when I was first hired. This was three years ago at a national brokerage firm. My particular class had a dozen people in it, most straight out of college. Though I was no financial genius at the time, I was surprised at the outset of our training to learn that some of my “colleagues” did not yet know the difference between a stock and a bond. My surprise soon turned to dismay when I realized the trainers cared very little about the financial lackings of the people they were teaching.
Sell, Sell, Sell
What the trainers did care about was clear: selling. The managers/teachers repeatedly reminded us that social connections, not knowledge, were the most important tools of our chosen profession. Indeed, one of the courses we took might as well have been titled “How to Sell to Your Close Friends — Or Anyone Else You Might Know in the Community.”
Before I go much further on this point, I'd like to stress that I understand that certifying brokers is not the express business of these type of trainers. Likewise, I do understand the importance of salesmanship and connections in a business as competitive as securities brokering. Still, it's significant that the obsessive, almost exclusive focus on sales-related skills left brokers in the most impressionable stage of their careers with the unmistakable sense that salesmanship trumps every other activity. From there it's not much of a leap to the sorts of ethical troubles that are burying the brokerage industry right now.
So it was, then, that we trainees came to believe that our jobs would revolve not around satisfying the needs of clients but around making a sale, regardless of client need.
I later learned that management believed product knowledge would develop over time, but without a grounding in product and finance basics, many of the new brokers struggled in their prospect meetings.
At this point we arrived at the low point of the training — a place I call “Fake It Till You Make It.” In one of our morning meetings, we were specifically instructed to bluff our way through client meetings. Even if we weren't confident in what we were selling (and how could we be with so little product training?) we were told to keep moving toward a sale.
To this end, during our training exercises we were told to pair up and to assist one another in coming across as convincing and confident, all the time keeping an eye on that prize: the sale.
Because I had a business degree and several years of banking experience, I had a bit more insight to the types of products we were selling than most of my peers. Thus, I was often asked to help out in their meetings. On one such occasion, a colleague, who I will refer to as Elizabeth Simpson, was attempting to probe a prospect on the type of investment he was interested in. The prospect eventually said he wanted an investment to which he could contribute on a pretax basis and withdraw after tax. To this request for a nonexistent product solution, Elizabeth responded, “We have several funds that would work for you.”
The next day in our morning meeting, we newbies shared stories about the previous day's meetings. Elizabeth told her story and, to my astonishment, management encouraged her by saying, “At least you were trying to solve their issues and make a sale.”
For me, this experience was the last straw; I left the training program and eventually caught on with another company. Still, I have a strong sense that the firm with training excesses was not alone its obsession with sales.
The industry is now learning that a failure to put clients' interests first invites trouble, but it should have been evident much earlier.
Kirsten Silencia is the pen name of a former manager of various wrap programs at a large investment house. She is currently pursuing a career in consulting.