Even advisors can get bad business advice

Too patient and empathetic?

Bad business advice? Marguerita Cheng, CEO of Blue Ocean Global Wealth in Potomac, Maryland, hardly knows where to begin.

“I was told that I made a lousy planner because I spend too much time on client service, I'm too patient and empathetic, and I'd never be successful working with younger clients and diverse and multicultural clients,” she says.

Advice from a bad planner

The person who first recruited Therese Nicklas, president of the Wealth Coach for Women in Rockland, Massachusetts, gave her some lousy advice about writing financial plans.

“His take was to use plans as a hook to get people to buy stuff, like life insurance, annuities or investments. He provided a link to software designed by the insurance industry that created plans tilted toward that outcome,” she says, adding that he has since lost his securities license.

To outsource compliance or DIY?

When Roger Ma, a planner at lifelaidout in New York, started his RIA, he read articles saying that spending $3,000 to $4,000 to outsource the initial registration/compliance process was the way to go.

He planned to take that advice and interviewed three different compliance firms. After talking with them, Ma realized that a compliance firm wouldn’t do anything he couldn't do himself.

“Instead of being dependent on a third party, I ended up doing my own registration. From beginning to end, it took me about a month,” Ma says. “Moving forward, instead of having to pay a firm to do my ADV updates or being dependent on a network that offers compliance services, I know the documents from the initial registration process and I can easily make updates according to changes to my actual business.”

Focusing on process, not goals

Jason Kirsch, president of Grow in Santa Monica, California, thinks that planners should rethink advice about strictly following sales goals.

“It’s not that goals are bad in themselves,” he says. “A long-term goal can be a kind of North Star guiding us forward. But when it comes down to the nitty-gritty of building a business, a preoccupation with goals can backfire. An emphasis on process is trickier, but in the end more sustainable, flexible and adaptable.”

The wrong kind of business

Pam Horack, owner of Pathfinder Planning in Lake Wylie, South Carolina, found her father’s intentions were better than his advice when she started her first firm.

“My dad told me that I should ask each person I talked with for 10 acquaintances' names,” Horack says. “He thought I should call them and pitch my product. That may have worked for insurance sales in the 1970s, but it doesn't fly now. Also, we are not in the pitching sales-type business, but in a relationship business.”

Even advisors can get bad business advice

Too patient and empathetic?

Advice from a bad planner

To outsource compliance or DIY?

Too ethnic?

Focusing on process, not goals

The wrong kind of business

Not a lot of golf in Brooklyn

Questionable mentorship