By: Jack WaymirecloseAuthor: Jack Waymire Name: Jack Waymire
Email: jack@paladinregistry.com
Site: http://paladinregistry.com
About: Jack writes for the InvestorWatchdog website and Worth magazine. He worked in the financial services industry from 1976 to 2004. For twenty of those years he was the president of a Registered Investment Advisory firm and a Broker/Dealer. Jack is the author of Who's Watching Your Money? The 17 Paladin Principles for Selecting a Financial Advisor and is a co-founder of PaladinRegistry.com.See Authors Posts (87) | January 29, 2010 | Deceptive Sales Practices, The Politicians

I was reminded the other night, watching President Obama’s State of the Union message, that politicians and low quality financial advisors use the same deceptive sales tactics.

First, Obama told people what they wanted to hear. They wanted to lower unemployment; he will lower unemployment. They wanted economic growth; he will create growth. Financial advisors use the same tactics when they tell investors they deliver high returns for low risk.

Second, Obama did not communicate any strategy for achieving many of his lofty “goals.” His strategic initiatives were deliberately vague so there is no measureable accountability. Less ethical financial advisors use the same tactic when they claim they can produce high investment returns, but provide no audited track records for past results. They hope you buy their claims so they can sell you their products.

Third, Obama added spin to make his agenda sound more realistic. He pays his public relations gurus a lot of money to produce spin that people will buy. The most important point about spin is that it is not true. An example of financial spin occurs when advisors show investors the track records of hot products. Then they tell investors they know how to identify hot funds before the performance occurs.

Fourth, Obama delivered his messages with as much conviction as possible. Conviction is a sales tactic that makes claims and spin more believable. Naive voters and investors tend to trust people who really “believe” what they are saying. TV evangelists are the epitome of conviction.