Ethics question

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May 14, 2005 12:38 am

Someone asked me this question...


Why should a client purchase a financial product through a broker/financial advisor/planner when they can go on the internet and purchase it themselves? Wouldn't the client save money by purchasing it themselves?

May 14, 2005 12:53 am

Oh, here we go.......wouldn't I save money by getting my medical advice from the internet, so why go to a doctor? Why should I have paid those bastards 150k for my house when I could have hammered the nails myself?   How can those crooks at Jiffy Lube rip me off for $30 when I take my car to them to get my oil changed? Wouldn't I save money by changing my oil myself?



My point is, the reason that people pay us is for advice. I don't know how long you've been in the business, but you'll soon realize that the reason that fees/commissions exist is because of you.



When a client has you, they get advice. Looking back, in October 2002, you tell them to buy more, or at least hang in there. If they do it themselves, they don't have someone educated on the market to let them know these things.



The "individual" investor will almost always buy high and sell low. Your job is to prevent that and reverse that. My two cents!

May 14, 2005 6:36 am

Not everything is about saving money.  People want to enjoy life,
and we supply coverage over something so they can worry about one less
thing, or make room for one more thing, such as more family
attention.  Its quality of life, not quantity of savings.  If
your clients and/or prospects are nickel and dimng you, fire them
and/or thank them for their time and send them on their way...its not
worth the risk and aggrevation.



You need paying clients period...and if you have something worth paying
for (which can come into question) they will have no problem paying
you.  Focuson what you supply, not what you charge.




May 14, 2005 8:57 am

I would not call this an ethics question.  Next thread.

May 14, 2005 1:39 pm

Financial services are now a commodity. Anyone can go on Etrade and buy stock or funds for example. Where we earn our fee is in providing advice and service for our clients. We deserve to be paid because we are better than the "do it ourself" alternative. 95% of people ultimately blow themselves up by going it alone.. Then they come to us with their portfolio down 50% and are NOW willing to pay for our services and listen to us... Seen it many times.

May 14, 2005 5:48 pm

You are right about the commodity comparison.  That is why you will see MASS consolidation and ultimately a huge reduction in the salesforce in this industry.  England had this happen and we will not be able to avoid it. 

May 14, 2005 9:04 pm

One thing I learned years ago, in this business, is that if you can't provide an good answer to this kind of question, then you aren't providing any value to your clients. Therefore, they can get it cheaper on the internet.


I would tell my clients, if they knew exactly what stock they wanted to buy, buy it through a discount broker. If they wanted an investment plan, come to me.


Some of my clients would devote a small portion of their investments to speculative stocks. These were stocks they heard about on tv or newspapers. I would always insist they keep their "spec" stocks in a separate discount broker account. I didn't have time to research these stocks, didn't have the expertise to manage them, and I didn't want their lousy returns "polluting" those I recommended.


My purpose in urging them to open a separate account at a discount firm was to avoid this conversation 2 years down the road when, inevitably, one of their "spec" stocks tanked and the client's memory has faded:


ME: No Mr. Jones, I did not recommend "Pets.com", you told me to buy it for you.


MR. JONES: Oh no, I think you recommended it highly. In fact, I think you gave me some research on it. Now, where's that 800 number to the NASD?

May 15, 2005 11:53 am
doberman:

One thing I learned years ago, in this business, is that if you can't provide an good answer to this kind of question, then you aren't providing any value to your clients. Therefore, they can get it cheaper on the internet.


I would tell my clients, if they knew exactly what stock they wanted to buy, buy it through a discount broker. If they wanted an investment plan, come to me.


Some of my clients would devote a small portion of their investments to speculative stocks. These were stocks they heard about on tv or newspapers. I would always insist they keep their "spec" stocks in a separate discount broker account. I didn't have time to research these stocks, didn't have the expertise to manage them, and I didn't want their lousy returns "polluting" those I recommended.


My purpose in urging them to open a separate account at a discount firm was to avoid this conversation 2 years down the road when, inevitably, one of their "spec" stocks tanked and the client's memory has faded:


ME: No Mr. Jones, I did not recommend "Pets.com", you told me to buy it for you.


MR. JONES: Oh no, I think you recommended it highly. In fact, I think you gave me some research on it. Now, where's that 800 number to the NASD?




100% Correct.

May 15, 2005 11:59 am

AMEN!


I've found that you can keep meticulous notes, have clients sign "hold blameless" letters, etc.  In the end, the client believes that anything that goes up is his idea, and anything that goes down is yours.


In the end, it's as Doberman and PGB have posted...if the client wants to wander off and try to find the next Microsoft, do it somewhere else.  The right kind of client will pick up what you're saying and respect you for it.  With the wrong kind of client, despite the size of the account, you're always one trade away from arbitration.

May 25, 2005 3:27 pm

i think it would be helpful to consult a broker/advisor/planner or the internet if you don't have enough information about the product selling. you will definitely save if you purchased it yourself but its quite a risk if you aren't really sure of it. but you should make sure they are giving you the right advises and they meet the standards/warranties the company provides.

May 25, 2005 4:50 pm

It's a conversation about two terms that people often confuse; "price" and "value".

May 26, 2005 2:45 pm

Hey Striker,



looks like I picked the wrong day to stop sniffing glue.


May 26, 2005 10:38 pm

You really should know the answer to this question before you ever get into this business...



It is definitely not an issue of ethics, its called Added Value

May 27, 2005 9:03 pm

I think most people, at least those smart enough to consider using a pro, understand that you get what you pay for. For many of us this is a lesson learned the hard way. 

May 28, 2005 1:26 pm

ETHICS,


Let's see is it Ethical to FULLY DISCLOSE ALL FEES AND CHARGES.....SOME SAY "YES"


BigPayDay, says "IT DOESN'T MATTER", it's buyer beware.....he works at Edward Jones....Ethics used to mean something there, didn't it ? 


Ethics classes have been rquired at Edward Jones for years, too bad their GP'S , AND ESPECIALLY THEIR MANAGING GENERAL PARTNER 3 MIL BILL HILL DIDN'T TAKE THEM..............  

May 28, 2005 2:06 pm

You need to seek some professional help before it's too late.



BPD

May 28, 2005 3:45 pm

BigPayDay(BRAINWASHED)


I answered your questions, answer mine, or we will all need who needs HELP, It's YOU




__________________
Hi Ho Hi Ho it's off to INDY we go...........

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BigPayDay
Senior Member



Joined: Jan. 10 2005
Posts: 217

Bench Warmer,

So you do what you do for Ted Jones. How special. Sounds like you have a warm heart.

You say you've moved on.

Dude get a grip. Jones has you by the neck and they are shaking you till you can't breath.....and then you wake up and ask your boyfriend to spoon you because you're scared.

Out.





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Player
Groupie



Joined: Dec. 08 2004
Location: United States
Posts: 64


BigPayDay (Brainwashed),


At least I can answer questions, let's see what your answers are ?


Are you AFRAID of the TRUTH?


There has never been a JONES SUPPORTER on here yet that has answered QUESTIONS, they only fire back insults...is that how they are teaching salemanship at Edward Jones......


SHOW US WHAT YOU ARE MADE OF "PUNK" make my DAY....



May 28, 2005 9:42 pm

What's your question?



BPD

Jun 2, 2005 2:29 am
BigPayDay:

What's your question?

BPD


The Questions and Answers go to the following Forum:


BigPayDay Defend Jones Answers Questions

Jun 5, 2005 11:43 pm
stanwbrown:

It's a conversation about two terms that people often confuse; "price" and "value".


My favorite quote from Bob Dunwoody


"In the absence of value PRICE is the ONLY question..."