Comments on: Solid Advice: ALWAYS Question Commissioned Salesmen! http://allfinancialmatters.com/2007/12/10/solid-advice-always-question-commissioned-salesmen/ A personal finance blog dedicated to discussing such topics as budgeting, asset allocation, 401K, IRA, cash flow, insurance, financial planning, portfolio management, and other areas in personal finance. Fri, 25 May 2012 02:50:51 +0000 hourly 1 http://wordpress.org/?v= By: always question http://allfinancialmatters.com/2007/12/10/solid-advice-always-question-commissioned-salesmen/comment-page-1/#comment-342682 always question Mon, 04 Aug 2008 00:39:36 +0000 http://allfinancialmatters.com/2007/12/10/solid-advice-always-question-commissioned-salesmen/#comment-342682 [...] &8230 JLP at All Financial Matters warns that you ought to always question commissioned salesmen.http://allfinancialmatters.com/2007/12/10/solid-advice-always-question-commissioned-salesmen/A return is not out of question for Sorenstam - Boston GlobeShe was born in Natick and while she [...] [...] &8230 JLP at All Financial Matters warns that you ought to always question commissioned salesmen.http://allfinancialmatters.com/2007/12/10/solid-advice-always-question-commissioned-salesmen/A return is not out of question for Sorenstam – Boston GlobeShe was born in Natick and while she [...]

]]> By: Daily Roundup: Cold Santa Edition ∞ Get Rich Slowly http://allfinancialmatters.com/2007/12/10/solid-advice-always-question-commissioned-salesmen/comment-page-1/#comment-188702 Daily Roundup: Cold Santa Edition ∞ Get Rich Slowly Wed, 12 Dec 2007 07:39:11 +0000 http://allfinancialmatters.com/2007/12/10/solid-advice-always-question-commissioned-salesmen/#comment-188702 [...] JLP at All Financial Matters warns that you ought to always question commissioned salesmen. He has some advice for hiring a financial advisor or a mortgage broker. [...] [...] JLP at All Financial Matters warns that you ought to always question commissioned salesmen. He has some advice for hiring a financial advisor or a mortgage broker. [...]

]]> By: plonkee http://allfinancialmatters.com/2007/12/10/solid-advice-always-question-commissioned-salesmen/comment-page-1/#comment-188139 plonkee Tue, 11 Dec 2007 12:20:06 +0000 http://allfinancialmatters.com/2007/12/10/solid-advice-always-question-commissioned-salesmen/#comment-188139 There's an upside and a downside to everything. When I recently used a commission-based mortgage broker, the mortgage was actually picked on my criteria (lowest total cost over 2 years) even though that meant that he had to go through and do the calculations by hand. The amount of commission was disclosed as a routine matter - I wonder whether it might be a requirement of our UK regulators (the FSA). I probably won't use a full-price mortgage broker again, but that's because I'm more sure about what I'm doing. There’s an upside and a downside to everything. When I recently used a commission-based mortgage broker, the mortgage was actually picked on my criteria (lowest total cost over 2 years) even though that meant that he had to go through and do the calculations by hand.

The amount of commission was disclosed as a routine matter – I wonder whether it might be a requirement of our UK regulators (the FSA).

I probably won’t use a full-price mortgage broker again, but that’s because I’m more sure about what I’m doing.

]]> By: Flexo http://allfinancialmatters.com/2007/12/10/solid-advice-always-question-commissioned-salesmen/comment-page-1/#comment-187956 Flexo Tue, 11 Dec 2007 06:31:48 +0000 http://allfinancialmatters.com/2007/12/10/solid-advice-always-question-commissioned-salesmen/#comment-187956 Even better, always question everyone. Once you stop asking questions, you stop learning and open yourself up to being taken advantage of. At least with commissioned salesmen, you KNOW who they're looking out for. With someone you don't know, you have no idea where their loyalties lie... Even better, always question everyone. Once you stop asking questions, you stop learning and open yourself up to being taken advantage of. At least with commissioned salesmen, you KNOW who they’re looking out for. With someone you don’t know, you have no idea where their loyalties lie…

]]> By: Dave http://allfinancialmatters.com/2007/12/10/solid-advice-always-question-commissioned-salesmen/comment-page-1/#comment-187779 Dave Tue, 11 Dec 2007 01:47:45 +0000 http://allfinancialmatters.com/2007/12/10/solid-advice-always-question-commissioned-salesmen/#comment-187779 Having worked as a 100% commission mortgage broker, I would have to say that I agree with these questions 100%. If more people were aware and asked things like this, it would actually have made my job *easier*, because the shady dealers would have been called out much sooner in the process. Then the honest brokers and salesmen would be able to compete based on product and value added, rather than just being smooth talkers. Sometimes a flat fee or salary can actually be counter to the customer's interests. As Mrs. Micah mentioned, people earning a flat fee have less incentive to steer you towards expensive things. But they also have less incentive to know about the full range of products, and why those expensive things cost more. If the total cost of ownership is actually lower for the premium product, or if it has other features that make it better suited to what you are going to use it for, isn't it actually beneficial for you if the salesperson knows this and steers you towards that "expensive thing"? I know that if I make the same $100 whether I sell the basic widget or the deluxe widget, I will always sell the basic, because "it's cheaper". But if I make $200 for the deluxe, I will know exactly what it offers and why it would benefit you. If you don't need that, you get the basic and go away happy. If you do though, you'll appreciate that the higher price (and higher commission) is worth it to you. So by all means, ask the tough questions. Ask what I'm getting paid. But if the answers are satisfactory, don't hold it against me just because I get paid for selling. Having worked as a 100% commission mortgage broker, I would have to say that I agree with these questions 100%. If more people were aware and asked things like this, it would actually have made my job *easier*, because the shady dealers would have been called out much sooner in the process.
Then the honest brokers and salesmen would be able to compete based on product and value added, rather than just being smooth talkers.

Sometimes a flat fee or salary can actually be counter to the customer’s interests. As Mrs. Micah mentioned, people earning a flat fee have less incentive to steer you towards expensive things. But they also have less incentive to know about the full range of products, and why those expensive things cost more. If the total cost of ownership is actually lower for the premium product, or if it has other features that make it better suited to what you are going to use it for, isn’t it actually beneficial for you if the salesperson knows this and steers you towards that “expensive thing”?

I know that if I make the same $100 whether I sell the basic widget or the deluxe widget, I will always sell the basic, because “it’s cheaper”. But if I make $200 for the deluxe, I will know exactly what it offers and why it would benefit you. If you don’t need that, you get the basic and go away happy. If you do though, you’ll appreciate that the higher price (and higher commission) is worth it to you.

So by all means, ask the tough questions. Ask what I’m getting paid. But if the answers are satisfactory, don’t hold it against me just because I get paid for selling.

]]> By: Mrs. Micah http://allfinancialmatters.com/2007/12/10/solid-advice-always-question-commissioned-salesmen/comment-page-1/#comment-187741 Mrs. Micah Tue, 11 Dec 2007 00:16:16 +0000 http://allfinancialmatters.com/2007/12/10/solid-advice-always-question-commissioned-salesmen/#comment-187741 Amen. I really don't trust people who work on commissions, because...well, I don't trust people, but I expect people who earn a flat fee to have less incentive to steer me towards expensive things. Amen. I really don’t trust people who work on commissions, because…well, I don’t trust people, but I expect people who earn a flat fee to have less incentive to steer me towards expensive things.

]]> By: Esmo http://allfinancialmatters.com/2007/12/10/solid-advice-always-question-commissioned-salesmen/comment-page-1/#comment-187631 Esmo Mon, 10 Dec 2007 20:42:08 +0000 http://allfinancialmatters.com/2007/12/10/solid-advice-always-question-commissioned-salesmen/#comment-187631 I compare this to a construction company contracted out to complete a public works project. If you pay them based on time worked, they will lengthen the project and probably not do a great job. If you pay them based on completion, they will hurriedly complete the project and not do a good job. The solution is when you pay based on both completion and time worked, but at a point where you can ensure a complete job at a lower price. I compare this to a construction company contracted out to complete a public works project. If you pay them based on time worked, they will lengthen the project and probably not do a great job. If you pay them based on completion, they will hurriedly complete the project and not do a good job.

The solution is when you pay based on both completion and time worked, but at a point where you can ensure a complete job at a lower price.

]]> By: MP3 Download Music http://allfinancialmatters.com/2007/12/10/solid-advice-always-question-commissioned-salesmen/comment-page-1/#comment-187614 MP3 Download Music Mon, 10 Dec 2007 20:06:38 +0000 http://allfinancialmatters.com/2007/12/10/solid-advice-always-question-commissioned-salesmen/#comment-187614 [...] Angela wrote an interesting post today onHere’s a quick excerptif the rate is significantly higher or lower than 30-year fixed rates, let it be a warning sign. If it is lower, it’s probably a teaser rate, which will go up in the future. 4. How much are you getting paid for this loan? … [...] [...] Angela wrote an interesting post today onHere’s a quick excerptif the rate is significantly higher or lower than 30-year fixed rates, let it be a warning sign. If it is lower, it’s probably a teaser rate, which will go up in the future. 4. How much are you getting paid for this loan? … [...]

]]> By: Jordan http://allfinancialmatters.com/2007/12/10/solid-advice-always-question-commissioned-salesmen/comment-page-1/#comment-187583 Jordan Mon, 10 Dec 2007 18:56:22 +0000 http://allfinancialmatters.com/2007/12/10/solid-advice-always-question-commissioned-salesmen/#comment-187583 This goes for all commission based sales people. As nice as people can be, everyone has bills to pay and will put their well being ahead of yours for the most part. If they are pressured to sell a specific product, either directly by a manager or by setting the commissions or spiff way higher on one type of product or another, then they will probably do it. It would be nice if all sales people were flat salary positions so we wouldn't have to worry about it, but then businesses would lose money because their sales people wouldn't need to actually sell to get paid. They could do salary + a quote, but quotas have the same effect as commission. This goes for all commission based sales people. As nice as people can be, everyone has bills to pay and will put their well being ahead of yours for the most part. If they are pressured to sell a specific product, either directly by a manager or by setting the commissions or spiff way higher on one type of product or another, then they will probably do it.

It would be nice if all sales people were flat salary positions so we wouldn’t have to worry about it, but then businesses would lose money because their sales people wouldn’t need to actually sell to get paid. They could do salary + a quote, but quotas have the same effect as commission.

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