subject: Transparency In Financial Services Is A Good Tool For Increasing Your Integrity [print this page] Many Financial Service Providers still continue to practice the art of shady marketing where their customers have no clue about the hidden costs that they have to pay for a financial product purchased by them. But what they fail to realize is that customers have become smarter than earlier and are taking each step cautiously to avoid falling in such a trap. Fees, penalties and trailing commissions are some types of these hidden costs that can drain them by thousands of dollars!
Sooner or later the customer is bound to see-through the tactics of such advisors and this hurts the companys image big-time. Not only do they stop trusting the company but even the product provider and the scope of getting any reference from them nullifies as well.
Why do the financial advisors do it?
The main reason why they refuse to be open with such things is because they are affiliated with a particular product provider (for e.g. Finance Company or Brokerage House, Insurance Company, bank and Mortgage Company) and may promote a specific offering that can give them more commission. But this mayor may not be beneficial to the customer. So while they continue to get trailing commissions on the lifetime of the product, the customer ends up paying the extra money that would have otherwise gone into the customers pocket. The catch here is that the advisor may earn money by such fleecing but eventually ends up losing his/her precious clientele and ultimately the reputation of the company.
With the volatile markets today, the customers are not taking any chances and will do the most thorough research before contacting such an advisor to get maximum returns on their investment. Not only this, they are confident enough to ask questions in depth and any financial advisor who fails to answer these clearly will land up in trouble.
What Needs To Be Done?
A financial advisor must be transparent with the customer and follow all the set regulations.
S/he should educate the customer about all the associated fees, default commissions, terms and conditions, commissions, rebates, and penalties.
S/he must let the customer know about the associated companies and what product they can or cannot sell, with the right reasons for doing so.
Customers who get such information in a satisfactory manner may proceed ahead but for those who even have a tinge of doubt, it is better to contact the product provider and get complete information in writing from them.
