Why Do Advisors Have A Conflict Of Interest
PART FOUR: BIASES AND CONFLICTS OF INTEREST Any time your advisor makes her money other than by advising you, she has an ulterior motive. Any salesperson--any salesperson--giving you advice has an automatic built-in ulterior motive. That motive is her commission for selling you something. The only advisors without an ulterior motive are those who get paid for their time in advising you--regardless of the advice given.
DOES YOUR ADVISOR HAVE A BIAS?
I have run into bias on the part of advisors in many forms:
1. Male divorce attorneys, especially the older ones, treating their female clients as if they were children. I have often been consulted by women seeking a second opinion on the handling of their divorce by their male divorce lawyers. …show more content…
Had these clients consulted an advisor without a conflict of interest, such as an attorney or an accountant, they would have paid an hourly rate for the advice, generally from $300 to $700 per hour. However, these clients might have learned things indicating that they should not have gone through with the transaction. Or they might have learned that they should have negotiated or structured the deal differently. Had the transactions been negotiated or structured differently, these clients might not have lost the money they lost. They might not have been forced to pay thousands of dollars in income taxes that could have been deferred or even avoided altogether. They wouldn't have been forced to pay the other party or the lender extra money. They wouldn't have lost rights that could have been protected or provided for. They could have clarified issues that were not clear and later caused a disagreement. They could have provided for issues that were never even considered. And so …show more content…
Does that mean you shouldn't use real estate agents? No. Real estate agents have several functions. They bring buyers and sellers together. They provide valuable information about comparable real estate transactions and about the real estate market in general. So, use your real estate agent as a spokesperson or even as an advocate in dealing with the other party. But never use your real estate agent as an advisor. Their advice could be anything from slightly tinged to outright black, but it is always muddied by their conflict of interest--their interest in their own commissions.
So it is with all salesperson-advisors. They can provide valuable information about the products they sell, about competing products, and about their markets in general. However, they should never be relied upon to advise you about your particular transaction. They always have that interest that conflicts with yours--their own
DOES YOUR ADVISOR HAVE A BIAS?
I have run into bias on the part of advisors in many forms:
1. Male divorce attorneys, especially the older ones, treating their female clients as if they were children. I have often been consulted by women seeking a second opinion on the handling of their divorce by their male divorce lawyers. …show more content…
Had these clients consulted an advisor without a conflict of interest, such as an attorney or an accountant, they would have paid an hourly rate for the advice, generally from $300 to $700 per hour. However, these clients might have learned things indicating that they should not have gone through with the transaction. Or they might have learned that they should have negotiated or structured the deal differently. Had the transactions been negotiated or structured differently, these clients might not have lost the money they lost. They might not have been forced to pay thousands of dollars in income taxes that could have been deferred or even avoided altogether. They wouldn't have been forced to pay the other party or the lender extra money. They wouldn't have lost rights that could have been protected or provided for. They could have clarified issues that were not clear and later caused a disagreement. They could have provided for issues that were never even considered. And so …show more content…
Does that mean you shouldn't use real estate agents? No. Real estate agents have several functions. They bring buyers and sellers together. They provide valuable information about comparable real estate transactions and about the real estate market in general. So, use your real estate agent as a spokesperson or even as an advocate in dealing with the other party. But never use your real estate agent as an advisor. Their advice could be anything from slightly tinged to outright black, but it is always muddied by their conflict of interest--their interest in their own commissions.
So it is with all salesperson-advisors. They can provide valuable information about the products they sell, about competing products, and about their markets in general. However, they should never be relied upon to advise you about your particular transaction. They always have that interest that conflicts with yours--their own