Lessons from Shakespeare on financial advisors: Part 5: How do you spot an Iago? (1 of 2)
In Parts 1 to 4 we discussed lessons from Shakespeare; the concept of the trusted advisor; the importance of strong communication and trust; and how you should trust your advisor. In Part 5 we look at the first 3 deadly sins of advisors to avoid.
In Shakespeare’s plays great leaders placed their trust in valued advisers. Some of these advisors turned out to be honest and trustworthy while others were charlatans whose advice was only ever deceptive and self serving. Deception is a recurring theme in Shakespeare – Rosalind (As You Like It) and Richard III deceive everyone, Claudius deceives Hamlet and Macbeth deceives King Duncan. It is clear that a number of Shakespeare’s ‘trusted’ advisors should never have been trusted. The lesson for you in selecting a financial advisor should be clear – there are characteristics of some financial advisors that should make you question their real motives.
Ask yourself ‘How do I know if I am talking to financial planner intent on making a sale or one focused on my financial future?’ Take a minute before you hand your hard earned money over to a potential advisor to consider “Are there any warning signs I should be aware of?’.
In Shakespeare’s plays the master of deception is Iago, Othello’s trusted lieutenant. Iago serves his employer only to gain from him what he feels he justly deserves – “I follow him to serve my turn upon him”. Likewise, if you employ an advisor whose interests diverge from yours this can wreak great havoc on your wealth and life.
Here are our tips to help you spot a potential Iago:
The seven deadly sins of advisors to avoid
- Avoid advisors that try to rush you – Heed the sage advice of Friar Laurence to the star-crossed lovers, Romeo and Juliet – “Wisely and slow; they stumble that run fast”. Any sense of rush you get from a potential advisor is a good indication that you are talking to a salesperson. There are NO advice or investment deadlines that you should rush for – be patient and take your time.
- Avoid advisors who charge commissions, fee rebates and/or volume bonuses – Avoid the Shylock types who pursue their pound of flesh by locking you into a complicated fee structure of kick backs in the form of commissions and volume bonuses. These are known as sales people and be wary, they can be highly convincing (they are trained salespeople after all!).
- Avoid advisors who put you into their own investments – The easiest way an advisor can “line their own coat” is to advise you into their own products. Even if your advisor does not accept commissions, pushing you down this route can still do wonders for their remuneration. Sadly, the benefits for you are not so clear. Never let a product flogger’s focus on their own remuneration form the basis for your key investing decisions.
 Othello, the Moor of Venice, Act I, Scene 1
 Romeo and Juliet, Act II, Scene 3
 Othello, The Moor of Venice Act I, Scene 1
‘Part 5: How do you spot an Iago? (1 of 2)‘ is Part 5 of a 6 part Series. Keep an eye out for ‘Part 6: How do you spot an Iago? (2 of 2)’