Trick or Treat? Separating Good Advice from Scary Sales Pitches

Trick or treat? When it comes to financial advice, it isn’t always easy to tell. What sounds like genuine guidance may actually be a sales pitch in disguise.

With higher incomes and less time to carefully vet every recommendation, physicians are especially vulnerable to sales tactics, which makes it essential to recognize the difference between true advice and a sales pitch.

What to Watch Out For (The Tricks)

Not all conflicts of interest are obvious. Most physicians know that advisors can earn commissions on insurance or investment products, but there are many other, less visible incentives that can quietly influence the recommendations you receive. Some advisors are pushed to meet sales quotas or earn bonuses for moving certain products. Others may benefit from referral arrangements, for example steering clients toward particular lenders, attorneys, or accountants who provide kickbacks in return.

Even the investment platform itself can play a role, rewarding advisors or firms when they recommend you invest in particular funds. And then there is the issue of fiduciary status: some advisors use the word freely, but only act as fiduciaries in limited circumstances, not across the board.

The way an advisor charges fees can also create conflicts of its own. It is important to remember that charging fees or earning commissions does not automatically make someone a “bad” advisor, and not all products that pay commissions are inappropriate. Insurance and investments both have a place in a solid financial plan. The real issue is transparency. You need to understand how your advisor is compensated so you can spot where conflicts might arise.

• Fee-only — Paid directly for advice, with no commissions. This is often the least conflicted structure. Be careful though: some advisors call themselves “fee-based,” which still allows commissions. That is not the same thing as fee-only.
• Assets under management (AUM) fees — A percentage of the money an advisor manages for you. While straightforward, it can create an incentive to focus mostly on growing your investment accounts instead of your entire financial picture.
• Hourly or project-based fees — Paid for the time an advisor spends or for specific deliverables. Transparent, but only conflict-free if not combined with hidden commissions.

For physicians, the key takeaway is to avoid assumptions: fees alone do not guarantee conflict-free advice. Ask questions and dig deeper to understand what else might be influencing the recommendations you receive.

What Good Advice Looks Like (The Treats)

So how do you know when you have found the real thing? Objective advice usually has a few hallmarks:

• Fee-only and fiduciary, all the time — Advisors are transparent about how they are paid and disclose any potential conflicts of interest.

• Education over products — They lead with questions about your values and goals, not a sales pitch.

• Transparent, not vague — You understand their fees, and there are no hidden layers of costs.

Do not skip the Form ADV. Every registered advisor is required to file this document with regulators. It outlines services, fees, and potential conflicts of interest in black and white. Reviewing an advisor’s Form ADV is one of the simplest ways to see exactly how they operate, and every physician should make a habit of asking for it.

Questions Physicians Should Ask

To separate the tricks from the treats, start with three simple questions:

• How do you get paid?
• Do you act as a fiduciary at all times?
• Can I review your Form ADV?

If the answers are vague, hedged, or overly complicated, think twice. And remember, it is always okay to seek a second opinion before making a big financial decision.

Final Word

Insurance, investments, and financial products all have a place in a solid financial plan. And many professionals in the industry genuinely want to help. But the reality is that incentives can shape advice, and not always in your favor. The more aware you are of how advisors get paid and what conflicts may exist, the better prepared you will be to protect yourself.

Wrenne Financial Planning is a registered investment adviser. The content of this blog post is intended for informational purposes only and is not intended to be investment advice. The views expressed in this blog post are subject to change based on market and other conditions. Some information has been obtained/provided from third party sources and is believed to be reliable, but its accuracy is not guaranteed. There is no representation or warranty as to the current accuracy, reliability or completeness of, nor liability for, decisions based on such information, and it should not be relied on as such.