Am I an “A-List” Client?

August 12, 2022


 

Are you an “A-List” client to your advisor?  Are you a “whale”, “a big fish”, or a “top-tier” client? 

Unfortunately, this is how you are described in the financial advisory world based on how much money you have.  And the more money you have the more attention you will get from your advisor.

One of the reasons I started Atlas Financial Strategies is when I was deep into my 7-year financial research project to find a solution to losing my defined benefit pension, I came across a lot of disturbing material about the inner workings of the financial planning industry.

One of the books I read was, “The Pirates of Manhattan” by Barry Dyke, which you can hardly even find today for purchase.  I think I ended up paying $35 for a used copy of it.  It spoke of how Wall St. got rich off the development and abuses of 401(k)’s, and how the American worker is stuck holding the bag after decades of fees and market losses in Mutual Funds.

That was bad enough, but then when I took the entrepreneurial leap and started my own annuity advisory business, I was in a world where former brokers were willing to share their experiences of managing portfolios (think of your hard-earned money) and what their bosses instructed them to do.

Over the years, I have discovered numerous articles, printouts, instruction letters, and YouTube videos advising brokers, variable agents, and money managers to prioritize calls to their clients based on the amount of money each person has with them. This newsletter outlines some of the most outrageous things that have been heard over the years. The goal of this newsletter is not to demonize all financial advisors, because there are some good ones out there that do the best thing for their clients, but this is to help make you aware of some of the common jargon, phrases, and perspectives in the financial industry that are potentially harmful to you and your retirement.

One that comes to mind first is a gentleman named, Mike.  I met Mike at my gym, and he told me was a former advisor at a big brokerage house in St. Louis, but now he drives a school bus.  I guess the confusion was written all over my face because he volunteered the following information:

“I was in a team meeting with some of the executives and a bunch of other advisors”, he told me, “and they were instructing us to push a particular mutual fund.  I raised my hand and asked the director why we were recommending this mutual fund when this other mutual fund has performed better and has lower fees.” 

Mike didn’t remember the exact answer because it was so non-sensical, but he remembers very well what that managing director told him next.  When the meeting was over, the managing director called him into his office and told Mike, “Don’t ever ask a question like that in an open meeting ever again.”

That was Mike’s “ah-ha” moment when he realized that he was there to make as much as possible for the brokerage house, NOT his clients.  Mike quit his position shortly after that experience and got a job driving a school bus, but said he has never had more peace of mind, and he has a pension now!

I would like to say that is an extreme example of some of the stories and witness accounts that I have heard over the years since being in business, but it’s not even close!

What are some other things that I have heard since being in the financial world?  

  • Call your “A” clients first to let them know you’re aware of the market volatility and are watching their accounts closely, to maintain your relationship with them.
  • If they don’t have $500,000 or more to invest, then don’t bother calling them – they’re a waste of your time.
  • Call the Big Fish first – they’ll cause the biggest ripples if you upset them.
  • Maintain your Top-Tier clients first because most of your income depends on them.

Here’s the biggest problem with this, besides being morally wrong – the less money you have saved for retirement, the bigger the impact from a loss will be.

Here’s an example:

If you have $5,000,000 and your advisor loses 50% of it, you still have $2,500,000.  You’ll be just fine.

If you have $300,000 saved for retirement and your advisor loses 50% of it, now you only have $150,000 left.  You may NOT be fine after a loss like that.

 

What are some other disturbing quotes that I have heard?

 

  • Pick your top list of clients and invite them to special events you put on.
  • Never spend too much time on a client with less than $500,000 to invest.
  • When they have less money to manage, charge them a higher fee. (This one drives me insane)
  • We will only help clients with $500,000 or more to invest.

 

I just had a wonderful conversation this week with a lovely lady and designed a strategy for her.  She doesn’t have as much as some of my other clients that I am currently working with, which tells me it is even more important for her to make the right decision about what to do with her retirement savings.

Even though she doesn’t have as much money, she still got the exact same attention from me that I give to clients that have millions of dollars.  In fact, she even said in appreciation that “I don’t feel like I’m being pressured to go any one direction.  You’re just answering my questions in a way that I can understand them.”  Unfortunately, with the last person she spoke with, she felt that she was being hurried through the process and actually canceled an annuity that she was getting ready to fund.

Saving her from a bad decision is what motivates me to continue through the pressures of running a business when at the end of the day, I don’t have to.  I’m still an Officer at my local fire department and I have plenty of income even if I never sold another annuity for the rest of my life.  But it’s quotes like the ones listed above that give me cause to continue to fight.

But I cannot fight every battle for every reader of this newsletter.  Not unless you reach out to me and let me fight with you.  But what are some questions you can ask yourself, or your current advisor to figure out if you are an “A-List Client” and if they’re really paying attention to your money???

 

7 Questions to Find Out If You’re An “A-List” Client:

  1. How far down the call list am I?
  2. Will they even get to me in time before I lose a bunch of money in a market decline?
  3. Why would someone base my value or importance on the amount of money I have with them?
  4. If losing 10, 20, 30, 40, 50% of my money is a huge deal to me, why would it not be important to them?
  5. Do I get charged a higher fee because I have less money to invest?
  6. Do I have fewer investment options because I don’t have a hefty sum of money to invest?
  7. Do I want to risk my money in the market even if I am important to them?

 

If you have ever felt ignored or not taken seriously because of the amount of money you have, or that you have been rushed to make a decision because the advisor seems like he has someone better to attend to, then please take the time to book a short phone call and I can analyze your situation.  I’m just a normal guy from South St. Louis.  I wear jeans to my meetings.  I drive a Honda that I paid cash for almost ten years ago.  I have no desire to impress anyone, and I will give you the truth, even if you don’t like it.  And at the end of the day, we may be a good fit for each other, or we may not.  No big deal!

My mission is to educate America on what its retirement options are.  And for you, it may not even be an annuity.  But there is only one way to find out!  To book a short phone call, just click the “Schedule A Call” button in the top right corner of the screen. 

Until then, I wish you the best in your financial education!

 

Marty

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  • Thank you Marty,very insightful info as always.Can’t wait to do business with you in the near future.Alejandro

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