Is Your Agent or Advisor a SITH Lord?

Does your agent or advisor use the following terms: "Always", "Never", "All", "None", "Only", "Everyone" or "No one"?

I find it interesting and I commonly find that there is an underlying belief or agenda behind such phrases, usually to elicit a particular emotional and/or buying response without further thought and discussion.

"Never get a reverse mortgage. They are a rip-off." "Always buy term and invest the difference."

"No one invests the difference."

"Everyone knows that... life insurance agents only sell life insurance for the commissions."

"IUL will always fail."

"Never leverage your home equity."

"Only work with a CFP and a fiduciary."

"I would die and go to hell than sell an annuity." While these things often SOUND good, I have a problem with statements like these. The problem with absolutes is that there is often no additional thinking behind it nor is there any questioning behind the agenda of such statements. It's as if that's all that needs to be said about that. I have a belief: There is a place for every legal and viable product and service. Whether it applies to someone... it depends. It's one of the most oft-phrases I say, even and especially in my podcast... it depends.

If your advisor is a 'Sith Lord', you need to ask why. What is the agenda behind such absolute statements? What is it they are trying to advocate for me (in the best case) and what might they be trying to hide from me (worst case)?

I wish it wasn't on the consumer to have to ask 'why', but even fiduciaries have their own biases, even if they aren't a disclosable conflict of interest.

The probably most important question behind absolute statement: What might they not understand about that topic?

If there is a place for everything (as I believe), and someone is dissuading me against it, why is that? Is it because they can't sell it (lack of licensing)? Or is there something deeper?

One Example: Non-Securities Recommendations

For me, as I write this (and I doubt this will change any time soon), I am not securities licensed, especially not securities licensed with a broker/dealer (SIE, Series 6, 7, 63, etc.). This means that I cannot sell securities for commissions, retail mutual funds, or commission-based variable life insurance or annuity contracts. I have been licensed with a Series 7 & 66 in the past, so it's not like I can't pass the exam (as some 'Sith Lords' might assume).

And I'm okay with that. But the natural question will arise: Why don't you offer these contracts? And I can list why that is: market volatility will impact the beneficiary value of these contracts and I can often offer similar contracts without the compliance and regulatory overhead of being with a broker/dealer. (This blog would generally not be possible in my frank tone with my opinions if I had to get each article approved before sharing.) That is a consequence of my chosen business model. At least I can explain why I do what I do, not that my business model is an absolute fact for what everyone and every advisor should be doing. Sometimes I get into online debates regarding the merits of various products. The problem is that they often talk about the product in the absense of the client's actual situation. That's why I wrote my earlier article on Three Kinds of Financial Plans and much of the problems is when recommendations for one area are being implemented and sold where they aren't appropriate.

Everything has a place. That doesn't mean that everyone needs everything. It simply means that we need to determine if it makes sense for your situation or not. A Sith Advisor... will generally stick to their guns regardless of circumstance.

If your agent or advisor is a Sith Lord, ask:

• Why do you say that?

• Is that a rule you have for everyone? Or is that advice for me and my circumstances?