In an era of transparency a new type of advisor gets the edge, but it starts with deliberate documentation and arming the prospect

April 11, 2012 — 4:56 AM UTC by Jack Waymire

1 Comment

I believe there are two primary types of financial advisors. There are Type B professionals who are intellectual, quantitative, and analytical. They rely on their qualifications and investment processes to win new clients. There are also Type A advisors who have limited credentials. They rely on personalities and sales skills to win new clients. See: 10 advisors explain how they build sales without getting 'salesy’.

I also believe many Type B advisors have limited sales skills. And, based on my experience working with thousands of high quality professionals, many Type B’s do not like sales activities. Many of them say selling is a necessary evil that is required to obtain new clients. They would much rather be helping current clients achieve their financial goals.


Type A’s, on the other hand, thrive in a marketing environment that maximizes the impact of their personalities and sales skills. They use a sales process I call “Like/Trust/Sell” to make money. They use personalities to get investors to like them — they know investors trust people they like. Once trust is established, they use sales skills to convince investors they are financial experts — they know investors do not question the advice of experts. This sets the stage for the final step — investors buy the sales recommendations of experts.

How do Type B advisors compete in an environment that is dominated by Wall Street’s sales culture? Based on our surveys, 22% hire marketing experts to sell their services for them. 43% limit their marketing activities to direct referrals from sources that trust them. Less than 5% commit time to acquiring more advanced sales skills. The issue is not skills, it is the sales process and the best use of their time. See: Stockbrokers are ready to shed their sales culture, says SEI Investments study.

Type B’s need a strategy that reduces the impact of personalities and sales skills and increases the impact of credentials, ethics, business practices, and services. The regulators may have created this strategy for them. FINRA and the SEC are in the process of putting more emphasis on transparency that protects investors from predatory sales practices, false claims, and scams.

The regulators may have finally determined the detection of fraudulent business practices after the investors’ assets are gone is not protection. It is the same detection mentality that is pervasive in law enforcement. There has to be a crime before regulators swing into action. Transparency has the potential to protect investors by helping them avoid bad financial advice, bad investment products, and scams while their assets are still intact.

Affording transparency

The only advisors who can afford to practice transparency are high quality professionals who have nothing to hide. Type A professionals will resist transparency that requires them to disclose their weaknesses. Transparency also has the potential to disrupt the Like/Trust/Sell strategies that are used by Type A advisors. It will be difficult to establish trust if the advisors refuse to provide information that is requested by investors.

Type B advisors who want to benefit from transparency should develop a three-part strategy. The focus of this strategy is improving marketing results. I know several advisors who have already embraced this strategy and they convert 80% of the investors they talk to into clients. See: Fidelity goes deep dish on marketing in Chicago with 25 advisors — including how to make bios more punchy and casual.

Part One is full transparency. You must be willing to disclose information that describes your education, experience, certifications, compliance record, compensation, and services.

Part Two is your willingness to document information. Verbal information is too easy to manipulate. Real transparency is based on documentation.

One-page document weapon

What this means is that the advisor develops a one-page document that describes his education, experience, certifications, compliance record, licensing, registrations, methods of compensation, reporting systems, and any other information he deems important enough to provide to the client. The advisor would present the document at the first meeting to facilitate the investor’s selection process. The advisor may also want to present a template suggesting the investor may want to obtain the same information from other advisors. The keys are written responses so investors have permanent records.

Type B advisors benefit from documentation because they have nothing to hide. Type A advisors resist documentation because it reduces the impact of their personalities and sales skills. They prefer verbal information that is easy to deny later because investors do not have a written record of what was said to them.

Sending a form with them

Part Three is to recommend investors require transparency from all of the advisors they are talking to. Type B advisors should provide a form that investors use to obtain information from Type A advisors. Any advisor who refuses to complete the form is automatically excluded from further consideration.

If you are not comfortable providing the form you can refer investors to a free data gathering tool on a website I founded ( This website provides free tools to investors that are based on transparency and documentation.

Type B professionals don’t have to wait for regulators to improve financial advisor transparency. They can take the initiative and practice transparency with documentation and improve their marketing results at the same time.

Jack Waymire is the author of Who’s Watching Your Money? and the founder of Paladin Registry an online service that matches investors to pre-screened financial planners, investment advisors and money managers and of the website

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Scott said:

April 13, 2012 — 10:56 AM UTC

Can you re-post.? A description of Part 2 is missing, and the first paragraph of Part 1 is repeated 2 paragraphs lower.

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