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  • Writer's pictureBob Brooks

Marketing Tricks by Financial Services Firms


Marketing is a necessary evil. The only way a company gets the word out about its services is through marketing. The problem is not marketing. The problem occurs when companies attempt to make their company look like something they are not. Here are some examples:


We make more when you make more


This company makes it sound like they are giving their clients a special deal if they make money or lose money. All fee-based firms make more money when their clients make money. All fee-based firms make money no matter the outcome. No firm works for free.


Individualized Plans


This makes them look like each client will get a unique plan that looks nothing like any other clients when, in reality, they are basing the selections on a model run by risk and need. For example, retirement income clients will use the model geared to provide income.


Annuities have High Fees


Ken Fisher of Fisher Investments spends a ton of money marketing against annuities by spreading accusations (some of which are false). He makes broad-based assertions like annuities have high fees. The reality is that there are multiple types of annuities, most of which do not have high fees.


Annuities Part II – 10% return guaranteed each year, up to 25% bonuses when you open an account.


The most irresponsible marketing strategy goes to Annuity Advisors. This one firm claims big guaranteed annual returns and bonuses on their products just for signing up. In reality, what you think you are getting is furthest from the truth. Although, in some combination, the numbers are correct - it is where you get the growth each year that makes these assertions the most irresponsible. These big guarantees apply to the income component of the product and not the growth part of the component. In other words, at the end of the contract, you are not going to cash out of an investment that earned 10% a year.


We are a Fiduciary


Being a Fiduciary means that, as an advisor, you put the client’s needs first. This firm makes it look as if they chose to be Fiduciaries. In reality, if you are a Registered Investment Advisor, you are required to uphold the Fiduciary standard.


No Commissions


This could be my favorite claim. Registered Investment Advisors cannot earn a commission in a fee-based account.


Do you really want to work with someone who uses trickery in their business strategy?


If you have further questions for Bob, please visit the Ask a Question page on the website, and Bob will get back to you.

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