Sell to Start

Here’s my best attempt at summarizing what good financial advice should look like:

We start by identifying what’s most important to you from a financial perspective, understanding that what’s important might not always be what’s optimal. We call these your financial goals.

Next, we create a detailed, well-thought-out plan to achieve those goals as efficiently as possible. This plan includes savings rates, tax planning, cash flow, debt management, and other important aspects such as insurance, retirement, and estate planning. We call this your financial plan.

Then, we allocate your savings and investments according to your plan (and risk tolerance) and stick to the plan, come hell or high water. We call these the tools.

It always goes in this order: goals, then plan, then tools. Tools do not drive goals, and the plan comes after the goals are set. We revisit all three at least once a year because life happens, and adjustments are inevitable.

That’s it. That’s what good financial advice looks like.

I’m bringing this up because, more than ever, financial advice is being distorted, overcomplicated, or flat-out misunderstood.

There’s more financial information available today than ever before. You can find investing tips from social media influencers, YouTube channels, podcasts, newsletters, friends who are “good with money” (quotation marks blatantly on purpose), and even ChatGPT.

But more information doesn’t necessarily mean better information. Much of what’s out there is biased, confused, or outright misleading. Here are just three examples:

Are RRSPs worth It?

The BIGGEST Risk to Retirement – Index Funds

Bank Financial Advice is Worse Than People Realize

The good thing about this content is that it arms me with ideas to write about. For the record: RRSPs are worth it for most people; index funds are not the biggest risk to retirement; and though bank financial advice can be suboptimal, it’s not that bad. And that's what I want to talk about today.

The apparent consensus among videos and articles about bank financial advisors (and financial advisors in general) is that financial advisors are salespeople (they have to be to start), and that salespeople are inherently bad (they aren’t).

This was me in 2014 and 2015:

I knock on the door to the rhythm of “doot doodla doot doo.” But I don’t add the last part, the “doo doo,” because that’s too obnoxious.

Before the person can answer, I take a good two or three steps back from the door and turn to the side. I’m a big guy, and I’m still playing rugby every Saturday, so my face is usually bruised, scratched, or swollen.

The door opens slowly. The person looks me up and down with the kind of stare that says, “Go away. Right now.”

“Hi, my name’s Vince. I’m starting a business in town, and since I’m way too cheap to pay for marketing, I thought I’d introduce myself in person.” If he smiles, laughs, or reacts in any way, I’ve got a chance. If he keeps staring, I don’t have a hope in hell.

“What kind of business?”

“I’m giving people financial advice. I just hope they take it.” All I need is a reaction to keep the conversation going.

“Thanks, but I have an advisor.” The door slams shut.

My feelings are hurt, but I move on to the next door. Eventually, someone will be interested. It’ll be someone who doesn’t like their advisor anymore, someone who recently inherited some money, or someone who genuinely wants advice but procrastinates. I’ll be the annoying person who makes them act.

With those people, I’ll awkwardly gather their phone numbers, mail a thank-you card, and periodically call for a few months hoping they’ll book a meeting (most won’t).

I repeat this process from 9am until 7pm, at least five days a week, for two years. I dread it every morning. I never get used to doors slamming in my face, dismissive looks, or awkward silences. But somehow, by year three, I have about fifty clients. They like me, I like them, and they’re receiving solid financial advice.

I was a salesperson for those two years. How else was I supposed to get clients?

My call script was even worse than my face-to-face script. Remember the Investor Center scene from The Wolf of Wall Street? I won’t link to it because some off it is offside, but you can find it on Youtube. I did something like that, except I was pitching TD Bank stock, not garbage like Aerotyne Industries. I actually said, “If you have any money to invest, I’d recommend buying some today.” I pitched the stock to get a meeting, but at the meeting I didn’t talk about the stock. I followed the process I describe here. And thank God for that.

Had I not gone through the hell of those two years, I wouldn’t be in this business today. Do I think what I do today is sales? Not a chance. I grow my business almost entirely by word of mouth. When I meet a potential new client, I give them my advice and let them know they can take it or leave it.

I’m not pitching stocks, I’m not following-up to the point of being annoying, I’m just giving advice. I still hope people take it, though.

There’s nuance here. And it’s important:

If no one had sold you on investing, or at least nudged you into taking action, would you have started investing in the first place?

The uncomfortable truth is probably not. The teller at the bank who says, “You have a high balance; you should speak with an investment person,” or the cold caller from the bank call center who says, “I noticed you had a large deposit, have you considered investing?” are doing you a favour. Are they making a sale? Absolutely. Do they have targets to hit? You better believe it.

But if the person they introduce you to convinces you to invest in the bank’s mutual fund (and I hope and pray it’s mostly equities), they've done you a favour because you never would have invested without the nudge, and your money is most certainly worth a lot more than had you kept it in your chequing account.

Nobody lies awake worrying about the financial plan they haven’t created yet. We’re busy, distracted, and we procrastinate. So sometimes, at least initially, we need a salesperson. Someone to convince us, push us, and help us overcome inertia.

The irony is financial advisors often get criticized for being salespeople precisely when people actually need selling. Good financial advice isn’t salesy, but many good financial plans start with a bit of salesmanship.

Don’t get me wrong. Like every profession there are bad actors, but with so much information out there today, they get found out pretty quick.

And that’s the reality. Financial advice is about clarity, honesty, and discipline. But before any of that matters, you first have to begin—and someone, somewhere, has to sell you on getting started.