on May 20, 2025
As I’ve discussed in past blog posts, fear sells. Fear helps media outlets and influencers get clicks and increase traffic to their websites. It is what keeps people tuned in to the television or scrolling through social media. Another way fear is used is to increase sales and that, unfortunately, can apply to financial advisors.
Though many financial advisors are honest and genuinely trying to help their clients, that is not the case across the board. Some people call themselves financial advisors, or wealth managers, or financial planners when they are, in truth, salespeople. For this group of people, sales are prioritized, while financial guidance comes second. They have quotas to meet, sales goals to achieve, and (often) commissions, bonuses, or prizes to earn for selling specific products.
How Can You Identify These Salespeople?
If you’re working with a so-called financial advisor who is an alarmist—someone who often tends to bring fear or negativity into the conversation—that is a huge red flag. A prudent and informed financial advisor will understand the ebbs and flows of the market and will be a voice of reason, rather than panic. This latter type of advisor will emphasize sticking to the plan, rather than changing course and making a rash decision based on fear. If they have helped you create a solid, long-term financial plan, it does no good to deviate from that plan during stock market slumps.
For the salesperson, on the other hand, fear is a great opportunity to make new sales. When people are anxious, it is easy to step in with a new product or solution—a new investment trend. If this person is incentivized to sell specific products, they might use fear as a way to crowbar those products into their client’s investment portfolio, whether or not they are a good fit.
Beyond Fear
In addition to leveraging fear as a sales tool, a sales-driven financial advisor might do other things that give them away. One of those signs is a lack of questions and curiosity. Any competent and reliable financial advisor knows that it is impossible to develop a suitable comprehensive financial plan without asking dozens of questions and gathering pages and pages of information about the client. We need to dig deep to gain a solid understanding of the client’s goals, background, family situation, assets, debt, expected issues or obstacles, and more. If the client has three kids who will likely attend college, that’s relevant. If they have a second home in Aspen, that’s relevant. If they have chronic, costly health issues, that’s also relevant. Getting to know one’s client is a long process, and anyone who glosses over this step should immediately raise a red flag.
Another sign that someone is more concerned with sales than providing objective financial guidance is the tendency to constantly recommend new products. Once your plan is in place, you should not have to toy with it much, unless you go through a major life change.
Another red flag is a financial advisor only recommending proprietary products—products that would directly benefit the financial advisor’s company. This is typically only a concern when working with large brokerage firms that have financial planning teams.
The heart of my message is this: it’s important to stay alert and recognize when someone is more of a salesperson than a true financial planner. Look for the warning signs I mentioned and trust your instincts. And if a financial advisor seems to be drumming up fear as a way to sell an additional product, that’s a clear warning sign to potentially seek advice elsewhere.