GET INTO ALIGNMENT

The vast majority of us started out working for captive, insurance-focused broker-dealers. They are the only ones who have created robust training programs for new advisors.  They can afford to run these on high-attrition onboarding programs because insurance is such a profitable product. 

But new advisors (Financial Professionals in current lingo) don’t know any better. 

When I started in the industry, the only financial advisors I had ever known were from my broker-dealer.  I was told that I would be offering financial planning.  “Financial Planning” was actually in the name of the company.  Note: that has since been removed from their name.  

My broker-dealer specifically worked with military professionals who are not known for their high levels of financial literacy, to begin with.  On one hand, serving this community is virtuous.  On the other hand, clients have little to no experience with which to contextualize the advice they are being given.  

They only know what they know and most of the advisors are just the same.  They have little to no outside experience with financial services.  

So you end up with a bunch of people that don’t know any better-advising clients who don’t know any better and there is one primary beneficiary of the situation, the broker-dealer.  

It took me a while to catch on.  In hindsight, too long.  I was doing everything I was told to do and I came to realize the only product or service that made me any meaningful money was selling Whole Life insurance.   

The Roth IRA I helped them start made me pennies.  The planning fees, once I could offer them, mostly went to the company.  Any other type of insurance was paid out so low that it made little impact on my revenue.  It was Whole Life insurance that was clearly incentivized above all else. 

No one said it out loud in the beginning, the math did the talking for them.  But, in time, the truth boiled up and became part of the parlance.  It was all about Whole Life Premium! 

The more I came to understand the underpinnings of the operation, the more uncomfortable I became.  I began to see that the “most successful” advisors were shamelessly slinging Whole Life to the detriment of everything else in the client’s plan.   

I lived in a very insular world.  It wasn’t until I got my CFP® designation that I realized my world had been skewed…hard…in the direction of one product.  And that there were many other ways to skin the insurance cat that may indeed serve the client better.  But it wouldn’t serve the firm or the advisor better.  

Then the hairline crack broke open.  I could no longer, with integrity, do business the way I had been taught to do business.  I pivoted and started “doing the right thing” even though I took a significant financial hit to do so.  I started blending my insurance recommendations with other types of insurance.  I started focusing on planning and making implementation secondary. 

I believe at the time a dollar of Whole Life Premium was paid out at 135% and other products and planning were around the 30-40% payout.   

Despite the financial punishment, I lasted four more years with the firm.  In hindsight, it is amazing that I lasted that long!  But keep in mind, that I didn’t know a single financial advisor outside my company.  I didn’t know where to go or really if the rest of the industry was any different.   

In time, I was recruited by a kind-hearted woman who worked with an independent broker-dealer.  She took the time to help me better understand the big wide world of independence.  I had been taught that it was cut-throat out there.  I was 34 at the time and I didn’t believe I had the resources or experience to go independent.  I thought that someday, maybe when I was 40, I would be able to start my own independent practice.  But she gave me the confidence and support to make the leap.  

I think back on that time and realize that she gave me a gift that I can never repay her for.  She made me believe in myself.  She ultimately allowed me to transition from out-of-integrity and into alignment and build a practice that I am so proud of! 

I share this story with you because I know that not much has changed.  Advisors who don’t know any better are still being taught to sell high commission products to clients who don’t know any better.  I know that there are many advisors out there who know in their hearts that they are no longer operating with full integrity, but they don’t know how to get into alignment in this industry.  

To all those advisors, I want to say, you don’t have to leave the industry to get into alignment! 

You just need to find an independent firm (B/D or RIA) that will treat all revenue equally and support Advice-Based Financial Planning. There are more firms than ever that have made this transition and are looking for new advisors to join their teams!   

You don’t have to start from scratch and make the leap into independence alone.  You can!  I did!  But you don’t have to if that isn’t your dream or it scares you.  You have so many choices! 

If you or anyone you know feels stuck in an old-school broker-dealer and wants a way out, please reach out to us.  I, or someone on my team, will be happy to talk with you to help you connect with the right people to explore your options.   

We know recruiters and leaders within broker-dealers.  We know great RIAs and advisors who are looking to grow their teams.  You don’t have to be like me, languishing for years because you don’t know how to make the leap.  We are here for you! 

You have choices and the industry needs you!  Email us at [email protected] if you would like to schedule a time to discuss your options.  We are happy to help! 

I hope this serves you, 

-Lucila 

If you are new to the industry or work in a particularly insular firm, the best thing you can do is get around other advisors doing business the way you want to do business.  Get out of your broker dealer’s bubble and join us on one of our live IMPLEMENTATION Monthly Mastermind group coaching calls. 

Email me and I will send you a link to join us, for free, on our next call…no strings attached! [email protected]. I hope to see you there!