My family once spent the day with a guide who took us to swim with dolphins in the Florida Keys. This wasn’t a tourist trap fish tank where some poor captured mammal entertains visitors from Hoboken. We were out in the wild, searching for dolphins in their natural, unscripted habitat. Our guide saw something on the horizon and sped up to interact with a group of four dolphins.
He stopped the boat and we jumped out, swam in different directions, and waited. They passed my mom first and she squealed in delight. It was akin to a spiritual experience, at one with nature. My entire family got to swim with wild dolphins eyeball to snorkel mask. Except me, but I have learned to forgive the dolphins.
Later that day we went to a reef and swam with sharks. Small ones and big scary ones. Logically, I know that sharks aren’t a statistical threat. But when you see one of those sharks gliding like a knife through the water, huge fins swaying side to side, you’re not thinking about statistics. You don’t feel at one with nature, you feel uneasy.
You’ve no doubt heard the term bull and bear market. Bull markets are up and bear markets are down.
Well, there are also sharks and dolphins. These are the different kind of advisors. The dolphin is super smart and altruistic. A shark not so much. When the waters are murky it’s hard to tell which is which.
Here are the attributes of a shark:
They're always hungry. Sharks are always looking for prey. This is seen in the advisor who is constantly calling, sending mailers, holding seminars. These aren’t unethical or illegal activities. But they are a sign that you may be just another number.
They eat anything. And anybody with a pulse and a dollar will do. They are omnivores, not specialists in their field. The field of financial planning is expansive. An advisor who has no group niche is an inch deep and a mile wide. An advisor who specializes in you as his/her niche is a better place to start.
They're always pressing forward. If it isn’t a shark can’t breathe. It must keep pressing forward. This is seen in the pressure that an advisor puts on the client. I can’t stand being pressured to buy something. I want time to think about it. Anything else and it feels like I’m being manipulated. This attitude is one of a salesperson, a closer, not a professional. If an advisor pressures you to make a decision too quickly, they probably aren’t listening to your needs first and foremost.
A dolphin doesn’t share these attributes.
Another way to spot a dolphin, an advisor who puts your needs before his/her own, is to ask if they are acting as a fiduciary. It’s not the only litmus test, but it’s a great place to start. You see a fiduciary is held, legally and ethically, to a higher standard. A salesperson in the financial planning field just makes suitable recommendations. A fiduciary financial planner must make prudent recommendations, disclose any conflicts of interest and be loyal to your needs first.
Additionally, trust your gut instinct. If something seems amiss, listen to your intuition. There are plenty of dolphins in the sea, if something seems fishy. Sorry for that pun, I couldn’t help myself.
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