Annuity IQ

Of course experience matters, especially when you are dealing with annuities and other financial instruments, but I have witnessed a growing trend. There is a difference between actual experience, individual vs. combined experience, as in adding together more than one persons time in the business.

I have 14 years of actual financial services experience which is a decent amount of time in the industry, but not as impressive as saying 30 years experience. What many people are now doing is using combined experience to make themselves sound more impressive. By that measure I could sound extremely impressive because my whole family is in the financial services industry.

My families combined experience is 75 years of experience, wow, a long time. Of course, this just sounds good and has little bearing on knowledge and all the different events that the market has suffered from over the past 75 years. As a matter of fact, all that combined experience covers just about the same time periods in the market, especially over the last 15 years.

In other words, it is meant to impress and has little impact on actual experience or knowledge. More or less it is a play on words, but I see more and more of this all over the place. Someone who claims 30 years combined experience could have one person who has been licensed for 29 years and another person licensed for 1 year or possibly it could be 30 people licensed for 1 year apiece.

In my opinion it is just stupid to make the combined experience claim and while you may look strong on paper, the experience you claim to have is misleading. By their logic I can now count my families time in the business as experience, but where does it end? Can I include my friends and co-workers? If so then I can chalk up another couple hundred years….funny I do not feel that old.

My point is, do not be afraid to be honest about your actual experience. While a longer time in the business is desired by many investors it is not always a good indication of knowledge. Some of the brightest people I know have less than 10 years experience in the business and they have taken their CFA exam and are on the fast track to becoming an investment banker or other high profile positions. The more honest you are the better the return.