Cannon Financial Institute

Fear and Greed: How to Train Your New Team

A conversation with Cannon Executive Chairman Phil Buchanan: Part 8 of 9

As a tenured FA, you will have learned through hard experience the truth of the old Wall Street saying that ‘fear and greed’ drive the financial markets.  This is useful to impart to your team members who lack your experience since this classic expresses a fundamental truth of investing which no financial models work perfectly.

No matter what strategy you are pursuing, or investment theory you are relying on, there are times when you will get slammed with losses because on occasion the financial markets will always move in unpredictable ways and make fools out of even the most brilliant investors.

The next critical issue in creating a team is probably contrary to what you may think about the people you work with.  “This is a broad and general statement but I am comfortable saying it,” Phil said, “the large majority of financial advisers in the financial services industry do not know nearly as much as they should about their profession.” People want to be professional financial advisers, Phil continued, but they don’t want to put in the extra 3 or 4 hours a week of reading, thinking and studying the business. Unfortunately, in a business as complex as wealth management there is no substitute for constant self-education.

Phil told me that when he says this to people in the industry, many often become offended, angry even. “We have a unique vantage point of being a wealth management training firm, with all of our professionals coming to our firm after time in the industry. We only work in the financial industry and our professionals are in the field every day. What continues to surprise them year after year? How little people know about their job in their area of the financial industry. In fact, what actually concerns me the most is that so many of the people we train or that I talk to in the business is ‘they don’t know how much it is they don’t know.’ Or to put it another way, most industry professionals think they know enough but they do not”.

As a tenured FA forming your team, you need to be aware that people you pick for your team will not know as much as you want them to.  This will be true both on hard knowledge and the soft skills of dealing with clients. Phil suggests that there are two areas where you might want to start. The first is the entire sweep of retirement services. This is the most complicated part of wealth management and for many of your clients, their wealth is in their retirement assets.

“The second area,” Phil said, “is one we in the industry don’t like to mention but it is very important especially when it comes to account retention. One of the most important things a good financial adviser can do is talk people out of buying a stock, mutual fund, ETF, et al that they’ve heard about from someone like their dentist and are convinced it is a sure thing.  This salient fact never seems to get mentioned yet with many clients the issue isn’t talking them into buying shares of the Tornado Alley Mobile Home ETF, it’s talking them out of it. 

To learn more about this topic, register for our Certified Wealth Strategist program of study.

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Contributing Writer: Subject Matter Expert Charles McCain

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