Dark Side of Financial Services

In all fields, the best methodologies are boring.

Even if all four of these sentimental or pragmatic justifications are true, doing the wrong thing is still worse than doing nothing.

“It is, of course, hard to get people in any profession to do the right thing when they’re paid to do the wrong thing.”

This pitch is made by Bill Shaw of Stansberry Research, the same group that brought you the perennial “Reclusive Millionaire Warns” spam article. Don’t be gullible.

There are at least seven major mistakes in this advice by Wells Fargo Asset Management.

Nice is different from good. You want a good financial planner not just a nice one.

Understanding the most powerful sales techniques doesn’t change the fact that they tend to work.

I cannot imagine any consumer who, if they understood how such a select list of advisers was actually compiled, would use this list. Why limit yourself only to firms willing to pay a referral service to endorse them?

Be on your guard to avoid wasting money following the advice of an article written to maximize revenue.

These are four possible consequences of Regulation Best Interest.

The SEC is allowing financial professionals to hide in a lower legal requirement, not meet a fiduciary standard, and call it “Best Interest.”

It requires discipline to ignore dire warnings.

On June 5th, 2019, the Securities and Exchange Commission (SEC) released their final draft of Reg BI, or “Best Interest” as it is called.

Rumors suggest that the network’s vetting is a five minute process where you are told the fees are about $1,000 a month.

The title is “Reclusive Millionaire Warns: ‘Get Out of Cash Now.’ ” Assuming you take the bait, the article and accompanying video uses all the psychological tricks. It takes a long time before what they are selling is revealed.

Cross-Selling is when a financial institution incentivizes their employees to sell or recommend financial products and services that increase the financial institution’s profits. The practice is as commonplace as it is fraught with conflicts of interest.

SEC announced that 79 investment adviser firms will return more than $125 million to clients after self-reporting violations of the Advisers Act.

The expense ratio charged by your funds matters more than you may realize.

Disclosures are always necessary but rarely sufficient to fulfill fiduciary obligations.

If you own these fund families with your Ameriprise Advisor, perhaps you should consider switching to a fee-only financial advisor.

Brokers tell investors they’re trusted advisors, and then tell the courts they’re just sales people.

In addition to all of the other reasons people hate annuities, seemingly fraudulent advertising and sales techniques is a major factor.

This is called “regulatory capture” and is quite common in government regulatory agencies such as the SEC.

Ameriprise was fined $4.5 million for failing to appropriately supervise representatives who were stealing client funds.

Are you consenting to harmful conduct by your financial advisor?

That the program failed is not a surprise. That the government decided to close a failed program, however, is.

If you are one of those consumers for whom the word “annuity” is enough to make them tune out a sales presentation, congratulations! You have have probably correctly understood the real challenges these products face.

As you read other financial advice sites, be wary of the sponsored content.

It will help you in life if you can learn to distinguish between content with ulterior motives and real financial planning wisdom.

The majority of the industry many not even believe that there is a better way. But you deserve better.

Incentives matter. If you are going to get a financial advisor, you need to select a fee-only advisor because you need to find an advisor you can trust.

We find the practices of much of the financial services industry repulsive.

Another free pass for the agents of brokers-dealers to dissembling under the guise of “Regulation Best Interest.”

We were surprised by our survey of the registered firms in the Charlottesville area.

You should not trust a point in time fiduciary for even a single heart beat.

We, the shareholders, do not like being treated this way.

The SEC released an embarrassingly poor 1,000 page document.

In 2007 the Financial Planning Association won a lawsuit that it filed against the SEC to force them to enforce the registration provisions of the 1940 Investment Advisors Act. The law still isn’t enforced.

“One principal purpose of the accredited investor concept is to identify persons who can bear the economic risk of investing in these unregistered securities.”

Unfortunately, no amount of rules-based compliance can force a company to follow the principles-based fiduciary standard.

Recommending clean shares does not free the industry from conflicts of interest.

Here is the list of broker-dealers who said the CFP should not expect those with the CFP® mark to not mislead consumer.

SEC-mandated titling will not be enough to save unsuspecting consumers from non-fiduciary financial professionals.

It will be a welcome change when the CFP Board can force CFP® mark holders to remove misleading content from their websites.

Albemarle Insurance Agency’s hiring solicitation shows the difference between insurance salesmen and fee-only fiduciary advisors.

Don’t let someone else live the life you’re saving for, but also don’t rely on Investor.Gov to protect your money.

TD Ameritrade has received a large number of complaints. But apparently not enough to change their decision. If you have a TD Ameritrade account perhaps your call will help them change their minds.

One of the problems with government reporting regulations is that personal information is made widely available for abuse.

There can be great value in the sage advice of a fee-only fiduciary advisor. Even if they brought no value for their investment management, they could still bring great value for their help in comprehensive wealth management. While a competent … Read More

I normally try to refrain from “bashing the competition,” but in this case, the competition’s practices are, at least to me, a moral issue.