The following was a conversation between my customer and his former financial adviser:
Customer: I need an adviser to advice me on this particular XYZ product which I had bought from someone who could no longer service me. I need a new adviser to tell me what to do.
Adviser: OK, you can appoint me as the servicing adviser for this product and I'll help you.
Customer: Thank you.
Adviser: By the way, here is another product for your consideration. I suggest you buy this ABC product.
Customer: Huh? Why should I buy ABC product.
Adviser: Hey, what is there for me for servicing you for XYZ? I need to sell you ABC to earn something.
The above is a true story. My client related this to me. However, most of the time an adviser will not say it so directly. Nevertheless, it almost always happen that a customer who wishes to engage the service of a financial adviser ends up feeling obligated to buy another product because the financial adviser could only earn a living through selling products. Isn't this so pathetic?
Therefore, always ask your adviser how he or she is remunerated. If it is purely by selling products or required by his company to met high sales quota, you'll always be feeling obligated to buy something from him. It is fairer for both client & adviser in which the remuneration is based on the actual service rendered.
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