Financial Products are Sold, Not Bought

Critics of the financial services industry (often with good reason) frequently remind consumers that financial products are typically “sold” rather than “bought” and implore them not to fall into that trap.  The concept here is that there is no enormous outcry on the part of consumers demanding to buy financial products. Instead, they are “sold” — pushed upon a consuming public that doesn’t understand them or — perhaps — even want or need them.  Instead, the alleged basis for their continued vibrancy and ongoing sales is that advisors get paid big bucks to sell them.  

It’s healthy to remember the interests of advisors you may be working with and — carefully! — to check their work and analysis. Far too many of them do not look out for their clients’ best interests.  But the idea that because people don’t naturally flock to buy something on their own means that it’s dangerous and bad for you simply doesn’t hold up.  People buy all kinds of terrible-for-you snack food in record amounts while the fresh vegetable section of my supermarket is never crowded. Literary classics are a tough sell (Marilynne Robinson’s wonderful Pulitzer Prize-winning Gilead sold only 345,000 copies) while “popular” fiction sells exponentially more (The DaVinci Code sold 60 million copies) and  porn is a multi-billion dollar business. Local symphonies are struggling  to stay afloat while Justin Beiber could support several many times over.

What is good for you and things that have enduring and intrinsic value are sometimes a tough sell.  But they are still good and good for you. 

Instead of being concerned about a financial product being “sold,” consider why it is on the table to begin with. For example, if you attended a sales presentation focusing upon a specific product or particular type of product, be careful. On the other hand, if the product only came up in response to a need or problem identified and discussed with the advisor and the product meets that need or solves the problem, be more open to it (but still do careful due diligence).  

I’m not racing to my doctor to beg for surgery.  But if my doctor can show me why I need it, I can be sold on it. Financial products and solutions should work that way too.