Have you ever dealt with a business adviser, for example a financial planner or insurance agent, did they try to sell you an insurance policy more than you wanted to pay, did they offer you a more expensive policy or suggested that you take out insurance which you can’t afford. I saw one company which had no key man insurance, then they were sold six $1 million whole life policies to the owners and their wives which they could not afford to pay. This was the most expensive type of insurance available, not the proper product in my opinion for what they were trying to do and the company could not afford the premiums. The insurance agent got a large commission for this sale but did he recommend products which were the best for the client or did he recommend products which generated the most commissions for himself?
This is only one of many examples which I have seen. I have seen financial planners sell tax shelters to little old ladies who have very little income and cannot afford any speculative investments. I have seen where insurance agents refuse to let the accountant make any comments on the products purchased because they do not want anyone to make changes to their compensation plan. I have seen people plan tax structures to save money but at the end of the day, they created fees for the person structuring the deal but did not benefit the client. If it takes more than 1 to 2 years for the plan to pay for itself, you have to wonder if the costs are worth it. However, if you are doing long term planning and succession planning, the pay back is only realized on your death but if properly structured, it should be worth the costs.
Many people tend to go to advisers who are from their own country. They go there because they speak the same language. That is true but they may not be the best advisers. I have seen too many examples where someone sees that you have been very successful and they take advantage of you by selling you the wrong products or risky investments or too much insurance because the adviser can get a higher commission.
Please note that the majority of business advisers are excellent but there are enough business advisers out there who are looking out for their best interest more than yours. You should always ask yourself, will this benefit me, is this what I need and what is the payback? If you can answer these questions and are happy with the answers, then you should seriously look at the advise that you are receiving. If not, question if you are using the right advisor. Do not fall into the trap that I should only deal with someone who is from my own community. In fact, many people go outside their community to others to avoid anyone in their community knowing anything financially about their business.