Financial Advisor Clients – Don’t Educate Them


Financial Advisor Clients – Don’t Educate Them

A lot of foolish financial advisors have taken some advice to educate their clients.  But that’s a waste of time because education does not change behavior.  Need proof?
You know cheesecake is high in calories and fat. Do you still eat it?
You know you should exercise everyday for best health. Do you?
You know that smoking is bad for your health. Have you quit?
You know that drinking more than one alcoholic drink a day is unhealthy, so why do you drink more?

complex graph-2You see, the knowledge of what you should do does not change your behavior. So the idea that educating your clients or prospect has value is ludicrous.  A recent study of employees who received education on contributing to their 401k because the employer’s match was free money produced no change in behavior.  The researchers concluded: The big takeaway here is that education and financial incentives appear to be ineffective ways to change people’s behavior.

Here’s the good news.  You’ve based your career on a struggle of helping people to do what they should do.  That’s a struggle—and now you can give it up.  It won’t help and it does not matter.  Now you can turn to what matters.  Rather than educating financial advisor clients and appealing to their logic to do what’s right, appeal to their emotions.  If you do that effectively, they will do anything you want.

You: Mr. Prospect, if you purchase these tax free bonds, you will save $20,000 a year in taxes.

Prospect: I’ll think about it

You:  But you’re just throwing the money down the drain!

Prospect: I know you’re right, I’ll get back to you.

You: (realizing that the LOGIC of saving taxes will not change his behavior) If you had another $20,000 each year, what would you do with it?

Prospect:  I really am comfortable and would probably just leave it in my savings.

You: Maybe you could use it for the benefit or enjoyment for your family. What about your grandchildren?

Prospect: I know! I would take the grandkids on that Disney Cruise!

You:  Wow! Can you imagine 50 years from now, when they sit with their own grandchildren at Christmas and show them  pictures of the Disney Cruise with their Grandpa?  What kind of memory do you think that will be?

Prospect:  How do we get those bonds?

You now know the difference between educating, which has no value, and selling.



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