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Legatus Group, LLC

Bad Products or Bad Advice?

Posted October 25, 2017 by Joe Yagar

After thousands of conversations and planning sessions over 23 years as an advisor, few are the same.  Common goals, concerns, and anxieties exist, but our state of mind before, during, and after are unique.  All too often, those who come to us for a consultation are at a point where they don’t know whom and what to believe. They want a fresh unbiased approach with no pressure to believe one thing or another.  They wish to be advised, not sold.

Our belief is that every product is created to fulfill a need due to demand for a solution to a growing problem.  Every product has those who experience success with it and those who don’t.  Think about your experiences with the various investments you have.  Real estate, stocks, bonds, annuities, life insurance, precious metals, wine, art, cars, horses, business venture, etc.  Some have likely met or even exceeded your expectations, and some have likely not.  Your next-door neighbor, colleague, friend, or significant other may have the opposite experience investing in the same.  How can that be?

Ask yourself, “Does a legally parked car intentionally cause an accident?”  Then ask yourself, “What causes a car to cause an accident?”  The answers are “No” and “Driver” respectively.  The same applies to every “investment” you choose.  And please don’t let anyone tell you that a particular investment comes without risk.  We believe that any investment made in the name of progress carries an inherent risk.  Even if the word GUARANTEED is attached to it.

Using the analogy above, products being the car and driver being the advisor (any person, including yourself, that influenced the decision-making process), it may be easier to see that products in and of themselves cannot harm you unless the advice behind your decision to take a risk on them is acted upon.  Therefore, we believe that there is no bad product, only bad advice.

The fact of the matter is that products should not even be part of the initial consultation.  Products are a dime a dozen but have no place in the conversation until we, as advisors, can present the solutions you seek conceptually, without a predetermined agenda, and in line with your core values.  Making a solution fit a specific product, regardless of whether it really does or not, is a recipe for disaster.  Unfortunately, it is all too common a practice.  It’s the advice that leads a product to be placed where it sometimes shouldn’t be, and what potentially causes some to meet their objectives and others to miss by a mile.

Keep in mind that occasionally even the best advice may yield a less than perfect solution.  A conceptually ideal solution may not have an ideal product to fit every aspect of it.  The objective is to discover, together, the solutions and supporting products and strategies that would provide the best chance for success.  The hardest part for you is knowing when you are getting the right advice and feeling good about it so that you can make the commitment and take action.  Without commitment and action on your part, nothing will happen.

So, when seeking advice, don’t let products dominate the conversation.  If you feel that you are being led down one path regardless of the challenge you seek to overcome, walk away.  A caring and competent advisor will listen carefully and keep ideas simple and conceptual until the challenges and objectives are clearly understood.  He or she will take the time to carefully think your case through before presenting a roadmap you can understand, and which clearly addresses your challenges.  If the advisor comes to the table with no other agenda other than to help you, and you follow through with commitment and action, the likelihood of success is exponentially increased.

At Legatus Group our philosophy is simple: True and transparent advice and to never do harm.  Is that how you feel about the advice you’re getting?

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Check the background of this financial professional on FINRA's BrokerCheck