Have you ever been promised something for free only to find out that there were strings attached–or worse, that it was a complete bait-and-switch? I had an experience recently that, while I didn’t lose any sleep over it, I did feel a little jilted by the outcome. Let me set the stage for you:
Recently, I was on a business chat forum with some of my peers when someone posted that they were getting rid of several pieces office art–for free. The only catch was that whoever claimed the pieces would need to pay for shipping. Since I am always interested in a potential bargain, I promptly responded to the offer—and I was excited to see that I was the first person to openly respond. “First come, first served”, I thought as I began to anticipate some new decor hanging in our office space.
The author didn’t respond right away, but when they did, they sent over the list and pictures of all the pieces they had to give away. There was quite a selection, and I told them that I would gladly pay for shipping for all of it…and I especially wanted 3 of the pieces (I mentioned each of them specifically). Another day goes by, and I finally get word back from the donor, only to hear that the response to the offer was much greater than they had anticipated. Now they were in a predicament with wanting to give something to everyone, and it appeared that there was now going to be a diplomatic selection process to determine which pieces would go out to each individual recipient. Naturally, I went from being excited about being the 1st person to ask for anything, to being slightly peeved about having to share the spoils. However, I remembered that I DID in fact request some specific pieces, so I still felt that I had nothing to worry about.
Well, the box arrived a few days ago, and I must confess that I felt totally disappointed. Not only did I not receive a single piece that I specifically requested, I got several pieces that were old and not particularly useful.
“What does this have to do with financial advisors?” you might ask.
The truth is that I found several parallels in my experience to situations I hear about and see on a daily basis. In our world, the one not-so-hidden secret is that finding qualified, interested clients is a constant battle for advisors. We live in a noisy, information-driven culture, where it is increasingly difficult to make yourself stand out amongst your competition. I have definitely heard the phrase “all you financial folks are the same” more than once. The comedy/irony/ridiculousness in that statement is that it couldn’t be further from the truth, but it definitely shows the impact that the constant bombardment of financial advertising, marketing, seminars, workshops, mailers, sales calls, lunches, flyers, blogs, coffee invites….you get my point, right?
Specifically, I’m referring to the “Free Prize” marketing systems used by Financial Advisors that take place in our business. I’m sure you’ve heard of them. They have many different forms:
- FREE consultation with one of our experts
- FREE portfolio review by our investment team
- FREE gift card to an expensive and delicious restaurant
- FREE 2nd opinion on your financial plan
- FREE social security analysis
- FREE FREE FREE…everything is FREE
- Did I mention FREE?
I’ll level with you–my team has used some of these approaches in the past, and yes, we have had some success. The truth is that it’s very hard to incentivize most people to take action to better themselves financially. (How crazy is that?!) I have found that people almost always wait to take action until they absolutely have to do something—they just retired (or were forced into retirement), they changed jobs, lost a spouse, or they are in just in over their heads.
The problem with waiting until you MUST make decisions is that it clouds your judgement—and the free prizes look much more exciting than they really are. You find yourself going to continual dinner workshops and seminars, only to find that most of the presentations are the same. You go and visit a few offices to get the FREE incentive, only to find yourself in the midst of a full-blown sales presentation….which you hate…because who likes being sold, right?
The fact is that the FREE Prize is just an incentive to get you to have a conversation—and in many cases to get you in the queue for a sales pitch. This is how it is….and most likely how it will continue to be until there is a massive paradigm shift in our industry. The key points to remember are these:
- Nothing is ever truly FREE—everyone is selling something. Those things that are advertised as “FREE” typically end up being much different in reality.
- Don’t wait until you absolutely need to make decisions to begin exploring and meeting with professionals. Many times the best professionals are not the one who scream the loudest or have the biggest basket of free goodies. If you put yourself in a situation where you MUST make decisions, you will likely face impaired judgement that is proportional to the amount of urgency you’re facing.
- Free incentives aren’t all bad–there are some great opportunities to receive services from qualified professionals. Just make sure that if you do decide to engage on a more direct, personal level, that you do some due diligence and research the person or team you’re going to visit. That way, you will have an understanding of their philosophy and the core services they offer clients like you.