It was a weekday and I was at my favorite sushi place in the city, Edo, eating their delicious lunch special with a few co-workers, when I received an email. It was from Grace. This is what it said:
Oh and did I mention he used to do stand-up comedy? So at least you’ll have a laugh.
The Meeting
On the day we met I waited for Neil by the elevator wearing my favorite travel dress: It’s a maxi that feels like wearing a blanket. I was not trying too hard…Neil emerged from the elevator. He was a small man in a big suit. We sat down at a table near the elevators (I needed an easy escape route…) and he asked me to take a survey to “determine my risk tolerance.” I told him I could just tell him it was “high”, but he insisted. He wanted me to take his survey. Fine. I did it and it revealed that I had a “high risk tolerance”…no shit Sherlock.
So then the selling began. He started showing me his customer flyers. He should have left them at home because they were not helping his case. He was trying to sell me one of their funds that had 1.5% base fees and a 0.5% load (AKA sales commission for him) that also had underperformed the S&P 500 (what it claimed to be similar to). He looked at me seriously and told me I need to be in this fund. I couldn’t help it and I promise I didn’t mean to, but I started laughing. It was just so ridiculous.
He looked a little taken aback, but it was what I said next that seemed to really scare him. I calmly told him that I do not accept plans with loads since they’re just sales commissions for him that is skimmed off the top of my money and that I currently pay 0.04% and am not interested in paying 37.5X more for sub-par performance. I wasn’t trying to be rude – just stating the facts.
He couldn’t leave fast enough. He grabbed all his sales materials with both hands and basically speed-walked to the elevator while hastily thanking me for my time. Despite him originally calling me maybe 10 times trying to schedule this meeting I never heard from him again.
A Happy Ending
One good thing did come out of this though. Grace had mentioned that he was her financial advisor, but that wasn’t the case – yet. She was interested in hiring him to manage $100,000. After we chatted about investments, she asked if I’d like to look over the proposal he had sent her. I said yes immediately! I love this stuff! She sent me the document early one morning before work and I was so excited that I dug in immediately. An hour or so later I sent her a long LONG email outlining page by page why this was a horrible investment plan. She replied with the below:
You astound me. Wow. And wow again. Seriously though, thank you for looking at this and for your exceptionally clear explanation of why I should absolutely not be taking this recommendation. I will look into Vanguard. On that front, do you work with someone in specific or is it really just DIY?
So at least one good thing came out of this! Grace took her money to a low-cost index fund at Vanguard and I learned that despite being 24 at the time and only learning from books, I can hold my own against Wall Streeters trying to sell me subpar products. I also have since learned how to conceal my laughter…
How about you? Have you ever been underestimated or sold a subpar investment?
It is hard not to laugh when someone says something preposterous even when you are a naturally polite and thoughtful person, like you. Sometimes it just happens, and it is hard to recover from! Great story, I’m an older reader so much of my early investing days involved mutual funds which did very well but still had bigger fees than today’s index funds, which either were not available or were just not very well known. Knowledge is power when it comes to avoiding fees and good on you passing on yours.
Thank you for making me feel better about my reaction 🙂 – and calling me polite and thoughtful! So kind! It’s great to hear what the landscape was like before the rise of modern index funds. Knowledge most definitely is power and it seemed like this particular salesperson was quite scared of it. Thank you for stopping by!
Cool story, I love it. I have to admit I avoid advisors as much as I can, and have so far managed to avoid that sit down meeting – as I’d probably react like you!
Smart lady! It really was this weird, convoluted situation that made me sit down with him. Without those strange factors coming together I wouldn’t have. It was a helpful meeting though – after I felt more confident than ever in my book knowledge!
Ha, ha! I love that you couldn’t conceal your laughter! I too have managed to avoid meeting advisers and their sub par advice but have had a few conversations with HR and older managers where it becomes quickly apparent I know more about pensions/SIPPs/investments than they do. Difficult not to be shocked when HR don’t know the rules for taking our company pension early!
Yeeah – my 50+ year old boss came to me for investing advice and our HR person didn’t understand the tax savings you get from a 401(k)s here. *Heavy sigh* It is pretty shocking.
So funny! It reminds me of a time years ago when a couple insurance salesmen came to our home to discuss life insurance plans. I’d already told them we were only interested in term insurance, but what did they try to sell us? Whole life policies, of course. That meeting got shut down quickly, lol.
Your response to this “advisor” was classic!
Haha – thanks! And that’s awesome you shut them down quickly! People not listening is a serious pet peeve of mine. My family is made up of half salespeople and they’re really good. They always say a main rule is to actually listen to the customer. Those insurance people need a lesson in how to successfully do business 🙂 .
Very funny story.
It pays to know your stuff or end up paying a lot of commission for poor performance.
Thanks again! And yeah it’s crazy what people think they can get away with.
I love this. Way to stand up for yourself. And I love how you reeled him in before you gave him the giant upper cut. Absolutely hilarious. Got what he deserved honestly.
Hahaha – thank you! I didn’t mean to reel him in, but I like your story better so let’s go with that 😉 .
I mayored in business and liked finances, I actually considered making it my career… Until I stumbled upon Software.
Nowadays I’m working as a PM and only do some personal financial planning, but I’m out of practice when quoting Mexican tax law and such.
It is kinda trendy among the software companies in here to invite some insurance/real state/bank loan broker to give “sound financial advice, towards your financial freedom” or some other flashy headline.
Most of the dudes would avoid me when finding out I was part of the administrative/accounting team. To some I would rise an eyebrow in disbelief and even let out a sarcastic grin or two. I advised my coworkers to dig deeper that what they were told at the pitch, because some stuff sounded sketchy.
And, yeah, totally. When these advisors face someone with some financial knowledge, they run like it is the plague; what they offer rarely is in your best interest (hehe)
That does seem to be a weird trend (inviting ‘so called’ financial experts into offices). It’s happened in all of my companies as well and they weren’t software companies. Interesting (though not surprising) that the salespeople would avoid you after discovering what you did! I need to perfect my raised eyebrow and sarcastic grin lol!
Did your coworkers follow your advice and look into what they were being sold? Getting people to do their own research is a big challenge in my friend group. They just want an easy answer, which causes problems if the answer comes from someone whose interests oppose theirs.
Most of the time no, some would at least ask other friends for financial advice… from there to make a plan and a good choice is an entirely different matter. But oh well, at least I’m at peace with myself for warning them. *shrugs
Totally – you tried. After receiving the information it’s their choice what to do with it.
Nice moves. I appreciate your “badassity.” I’m pretty sure a certain mustachioed man would applaud your epic face punching prowess.
Is It cool if I borrow your moves next time I get sold to like that?
Hahaha – thank you so much! And I can only hope 🙂 . Of course you can borrow my moves! Let me know how it goes.
Amazing! I laughed hard! I can imagine what it felt like for you and for him. Maybe you felt inappropriate at that time, but what you did was exactly the same as catching someone with a hand in your pocket stealing your wallet. But 10-100x the same amount.
These azzholez know that there’s no way to sell their sheetty products to someone who’s savvy. So they go emotional and try to convince you with with persuasive methods but as soon as they smell you’re not ignorant they need to run away and go exploiting next one in the line.
I don’t know why they don’t teach basic financial self-defence in school. A 4 hours course would be enough to immunize for life.
The hand in the pocket analogy is a good one. And definitely makes me feel better about my reaction! He really did go the emotional route, what with connecting to a college classmate and then asking to talk to her subordinates (who feel they can’t say no). Sneaky sneaky!
It might be a little conspiracy theory-like, but I can’t help but suspect not teaching “financial self-defense” (AWESOME title by the way) in school is intentional. We aren’t taught how to avoid simple mistakes like what it actually costs to pay interest and credit card companies make a boatload of money off of that. Similar with investing and life insurance ignorance. It sounds like you should create that course though. You already have an amazing name picked out!
challenge accepted 😀
I’m going to popularize financial self-defense as a mission once retired!
Awesome!! I’m willing to be part of the beta test! Free of charge 😉
“Financial Self-Defense” – What a great concept!
Yeah we really need to get back on that idea!
Ha, it obviously pays to know even a little about this stuff. Same could be said for computer and car repairs. There are so many people getting ripped off because on average the “experts” know people don’t know the first thing about it and will just say yes to whatever is presented. It’s always fun to be able to avoid a trap like this and a super bonus that you got to do it for a friend as well. Great post!
Great point on computers and car repairs! I’ve taken classes on car repairs, but haven’t dove into computers – Hmm! New idea! Though I haven’t ever had a computer repaired like I did cars in high school – when they start acting up I sell them on eBay and use the proceeds to ‘subsidize’ a (new-to-me) used model. Still something I should learn though 🙂 .
And yes it’s crazy how people just go along with what they’re told. In my current marketing job sometimes we create items for the sales teams and the first thing we’re always told is “the salespeople know nothing about this product. They’re salespeople. We need to make them sound like they know what they’re talking about” *facepalm*.
But yeah I was so excited I got to help a friend! Thank you for stopping by.
Perhaps computer repair is a bit of an outdated concept these days. Software upgrades, protection plans, and anti-spam/virus protection are the newer unnecessary up-sells I’ve seen people fall for and I’m sure there is some new equivalent in the social media age that I just haven’t realized yet.
Interesting! I hadn’t thought about the software side of things. For social media, maybe classic online scams? No matter what it is I’m all for learning so we can avoid common pitfalls!
This was beyond enjoyable to read. I was super excited to see what else you would say or do.
And great job saving your friend thousands of dollars!
-FSD
Aww thank you!! It was a fun interaction. And yes – at least something good came out of it!
Ahahaha, this really made my day. What an awesome story – so glad you showed that leech what you’ve got between your ears and saved your boss a ton of money in the process as well by the sound of it. Way to go!
I’m so glad! Leech indeed with those crazy loads – what are they thinking?! And thank you!
Hah I’ve never met with a financial advisor (DIY for the win since I’m so young and don’t have a ton of money I’m working with anyway!) but I can imagine I’d have a hard time not laughing at the upselling, too! Awesome job on convincing your friend to forego all the commissions and do things herself!
That’s awesome – definitely keep up that streak! I don’t know if this boss/friend reached out to me because she knew I was into finance or what, but I definitely didn’t have a lot of money at the time (and she knew what I made…). Weird. But anyway, I’m glad I’m not the only one that would have that reaction! I was really shocked at myself. I’m usually better at hiding my feelings. And thank you!