I walked into the crowded freshman dorm and introduced myself as Playboy’s representative on campus. I said,” I am taking orders for subscriptions to Playboy for 12, 24 or 36 months”. I signed up the entire dorm. As a freshman who needed money, I knew I had hit a gold mine, and I worked it very hard. Following my success at school, I decided that I would sell Readers Digest door to door to housewives. Well, I learned a good lesson that summer. Not all magazines are created equal. I sold one to my Mom. Not one after that.
In the early 80’s, when I was managing for ML in Chicago, we were offering money-market accounts paying 22%. They were selling like Playboys to freshman boys. The FA’s didn’t want to sell them because they didn’t get paid. Dan Tulley said, “Sell them to anyone who wants one”, so we did. Later, those assets became the fuel for the booming equities of the 90’s. Was it the best thing for them? No. They should have bought 14%, Zero-coupon, 30-year treasuries; but they wouldn’t, because they were convinced interest rates were rising. The Playboy and the money market fund were, at the time, the “product of least resistance”.
Then, as now, there is always a POLR( Product of Least Resistance). What is it today? You tell me. What should you do with the POLR? As a new FA, you must grow your practice. Knowing what the market wants and is willing to act on immediately will shorten your sales cycle. First rule, of course, as in medicine, is to do no harm. When looking at a high-yielding, preferred, or whatever the POLR is today, remember Rule #1. As you gain the trust and confidence of your client, steer them away from the POLR to the product that will meet their needs over the long term. As you educate, entertain and retain your clients, always remember that your clients are driven by emotion. Your job is to balance that emotion with logic and help them to make better choices.