October 15th, 2013

A Modern Day "Wolf in Sheep's Clothing"

By Ron Nakamoto

The article below describes a sales technique to help financial advisors who are compensated by gathering "assets under management" retain those assets as wealth is passed to heirs.  (Assets under management means that an advisor gets compensated on an ongoing basis by the amount of money invested, not by investment results, the one time "sale" of a product, or other more transparent methods).

The technique involves a group workshop where the advisor/facilitator "tease(s) out specific memories, stories and statements of values that clients may not have articulated before".  The event ends with a set up question, “Do your children and grandchildren know the stories and views that you shared with us this morning?”  The "kill" as it's described in the article then calls for a facilitated luncheon where families get together and talk about the insights, wisdom, and life lessons that were ostensibly revealed in the workshop.  This leads to the appearance that the advisor is "in a generous, beneficent role — in which you don’t appear to be soliciting at all."

To me, this is a modern day version of the "wolf in sheep's clothing" fable.  It's also a symptom of a pervasive, insidious mindset within the financial services industry.  Advisors convince themselves that they are "adding value" by conducting workshops and hosting follow up luncheons.  And perhaps they are in some instances.  But what's the underlying intention?  If it's to continue to be compensated under an opaque system that disconnects the value created from the means of compensation (as reflected in the perspective of the author of this article) then I maintain that this is a deceptive sales tactic that places the advisor's interests ahead of the client's interests.

I truly believe that the family stories and narrative wisdom are the essence of what sustains the family culture and the family wealth.  In my view, an industry mentality that incentivizes and encourages advisors to view stories as a means to retain assets under management perpetuates an insidious self-deception amongst advisors.  More importantly, I think the shallow treatment of family stories as sales tools by financial services organizations actually undermines genuine family and societal traditions.  In this context, I believe the practice is subtly but perniciously inhumane.


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Use Clients’ Life Stories to Bring in Their Heirs
Advisors who facilitate intergenerational conversations make a good impression.

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