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How to Identify a True Financial Professional vs. a Salesman

Bob Bockel | Lead Strategist, BXY Financial Network

Over the past several years, there has been much discussion in the financial industry regarding the role and title of those assisting the general public. Many questions have come up, such as: Who is a financial professional? Who is a broker? Who is a fiduciary? Who is ethical? Who is self-interested? This has caused much infighting among those who feel their methods are truly acting in clients’ best interests. I am not here to settle this argument nor do I know what all the rules and regulations should be. Perhaps the first question should be – what is the ideal role a financial professional can play to best serve the interests of their cliental?

The real issue lies in the fact there are many areas to address in someone’s financial life and various specialists involved. There are insurance agents, lawyers, bankers, employee benefit specialists, investment professionals, real estate agents, accountants, etc. They all have their particular areas of focus, expertise, and method of compensation. None of them pay attention to those areas outside of their primary specialties. There is no single person making sure all of these individual decisions make sense together in the big picture. The investment manager isn’t too concerned with what is happening in the insurance area because that is not where their training lies. In fact, the more resources allocated to insurance means less available to areas of investment. The same goes for all areas of financial life – all of the individual financial professionals want funds directed towards their particular area. Some financial professionals refer out business occasionally to other specialists but there is rarely follow-up to coordinate all of these individual decisions. For the most part, we segregate all of our financial decisions, but they are all intimately related. Our money all comes from the same pile – if we spend more in one area, that means less for another area.

If we want to develop a true financial philosophy, strategy, and plan, we need a mechanism for bringing all of our financial decisions together. In developing our strategy/plan and mechanism, some questions must be answered:

  • What products are involved?

  • What products are NOT involved?

  • What is the order/priority of all the products and decisions involved?

  • What financial professional will “quarterback” and coordinate the overall strategy? What will guide the underlying philosophy? Opinion? Economic science?

  • What will be used to test, measure, and verify the various options available to us?

In a perfect world, there would be one person facilitating and communicating with all people involved. They would make life easier for the client by handling much of the leg work behind the scenes, so the client can focus on their life. The “facilitator” brings all of the areas together into one easy-to-follow strategy. Ideally, all areas of financial life are included and there is a clear methodology as to when and why everything is done. It is important that there is one leader because if we are getting 10 pieces of advice from 10 different people, most of us will be paralyzed by confusion and simply maintain the status quo. A good analogy would be a general contractor coordinating the subcontractors. The architect comes up with the blueprint and it is up to the general to execute. The subcontractors can’t just all randomly show up to a site and start doing the framing, concrete, plumbing, electric, drywall, etc. There is an order, a timing, a methodology to make everything work. Our personal finance should be run in a similar fashion.

If we can execute our financial strategy in this fashion with all areas integrated into an overall effective and efficient plan, then we are in an ideal situation. When we get as close as we can to the ideal and you have a point of contact person leading the way, does it really matter what you call them?



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