How to Be a Contrarian Financial Advisor

Posted by adaniels in Blog on July 12, 2012

How can you be successful in the world of financial advice? Nick Murray of Financial Advisor Magazine argues that you should go against the grain, and having “the courage to stand squarely against the public consensus.” Here’s what else he suggests for the “contrarian path to excellence,” as the magazine calls it:

Start prospecting again: He says you have to realize that unless you are already at the top of your field, it’s unlikely that your current book of business is going to get you where you need to go.” 

Focus on retirement planning: According to Murray, prospecting will be much easier than in the past if you simply spend the next five years doing nothing but helping those who need help with retirement, especially some of the 17 million Americans planning to retire over the next five years.

Stop focusing on current issues in the news: Murray says that “perspective, not prediction, should be the stock in trade of today’s contrarian.” So stop worrying about the volatility of the current times. 

Fixed income isn’t enough: Quality equities, not things like CDs or bonds or fixed annuities, will grow your customers’ portfolio more than anything else. Explain that to them.

Pay attention to uncertainties: They can actually “be the friend of the long-term investor,” the article notes.

Don’t be concerned that some are avoiding equities: The author says that “great waves of enthusiasm as well as of dread—manifested in the public’s interest in, or flight from, equities—have, if anything, turned out to be a contrary indicator.” So pay attention.

Go to where the puck will be: He uses a hockey metaphor and suggests looking as to where the “puck” in the market is going to be, not to where it is now.

Your advocacy will eventually pay off:  He compares prospecting with equities to what Johnny Appleseed did, in giving out seeds, but notes that people will remember your advice in the future.

Help customers figure it out: The big question is whether your customers think they will outlive their money, or vice versa. Show them ways to do the latter.

 If you are rejected, you are on to something:  Murray concludes by saying:  “The more you get ‘rejected,’ the more certain you can be that you’re right.” Food for thought.


You can follow any responses to this entry through the RSS 2.0 You can leave a response, or trackback.

Leave a Reply

Your email address will not be published. Required fields are marked *