Churned and burned

I feel like we may be getting shafted by our financial advisor and unsure what to do next.

Some background info: My brother and I inherited a $1 million that was put in a trust in 2018. Since my brother and I were young and dumb, my mom was appointed as the caretaker of the trust and she gave it to here trusted financial advisor to invest/manage until we wanted it transferred. He manages other family funds as well (529s), including her retirement. So we thought it was fine. This amount basically makes up all of our assets.

Cut to now, I’m in mid 20s, my brother is slightly younger, and it’s time to transfer and split the trust. We go to meet this financial advisor, and we were thinking, hey he probably didn’t preform as well as the market, but there should be some gains here. We both thought we were going to stay with him and maybe just tweak our portfolio. Then the meeting happened, and I feel like we’re getting f*cked. I’m not financially literate though, and so I would really appreciate others perspectives to see if I am being crazy.

Reasons why I think we may be getting reamed:

• Over 6 years our total gains on our $1 million principal is $100,000One of the main reasons it’s that low is because, for the last 6 years, the portfolio has consistently been 70 % CDs and 30 % no cost basis at & t stock my grandparents bought in the 80s.
• He has our money invested this way because he swears the market is going to crash. Yeah, he has been timing the market INCORRECTLY for 6 YEARS. I asked if he would do anything differently at this point and he said no b/c it’s going to crash this year. I asked him what would his investment strategy be if it doesn’t crash this year, and he said it will crash and did not give me a straightforward answer.
• When I asked him what commission he was getting off a portfolio like this, he tried to tell me none since it’s not a fund like ETFs(which he gets 1%). After some persistence he finally told me he gets commission from the bank for every CD he buys/sells. Idk if that’s normal so any insight here is great. My mom’s portfolio that he manages is diverse and is mainly stocks and index funds. She is about to retire, yet he puts her in a riskier portfolio than us. And for us, with longer outlooks, he puts all our funds in cds because he swears the market will crash. If he really thought the market will crash, why didn’t he push for my mom to reinvest more of her funds in cds as well? This really bothers me and maybe there is something I am missing here, as I know little about investing. So please let me know.
• He spent the whole meeting talking about how the market will crash, showing as data and graphs as proof. This data is all public info, and I understand where he could be drawing conclusions like this, but if you’re wrong for 6 years, you’re wrong for 6 years. He went on for 40 minutes before I had to push the conversation towards our actual portfolio. Idk why but this really rubbed me the wrong way.

There is maybe more, but this is what I have for now. I asked him to call me once the first cd is up so we can discuss what to do with it, and he called today. I honestly feel like I should just ask him to transfer the funds to me and I’ll put it in an index fund. But this puts us in a situation where every time a cd is up I’m slowly transferring. Idk what to do.

I understand I was an idiot for not taking agency in this situation earlier. But all I can do at this point is focus on the now. My brother is more financially illiterate than me and my mom gets defensive when I start asking questions. So, what do you make of this? Am I reading this wrong or is he screwing us? If he is screwing us, from a range of incompetent to malicious, how bad?

I was approached by a "financial advisor" who offered free financial advice. This planner was a friend of a friend, so I agreed but told them straight off the bat that I was not looking to hire a financial planner. They said that was fine, and that the advice would certainly be free because I’m a friend of a friend.

This is where I made my first mistake. After a few meetings, this advisor gave me a "financial plan" that included paying for term life insurance AND whole life insurance AND disability insurance (all policies under the company they work for). These would come out to $4,700/year when my salary is only in the $80-90k range. Not to even mention that I am 22 years old with no dependents and have no need for life insurance. This "financial plan" also didn’t include rent, mortgage payments, car payments, or anything else I might need to pay in the future.

I can understand being advised to get disability insurance, but this financial advisor knew that I had not even signed up for my company’s disability insurance and so would not be able to make an informed decision on it. I told this person "no," but they tried to convince me I was making a bad choice. They told me that whole life insurance was a good investment, even better than investing in some index fund, and generally made it sound like this would be the worst financial decision of my life.

I asked my friend about this, and it turns out his mother also sells life insurance. The difference is that she’s ethical and only sells whole life insurance to people who actually need it (i.e., not people in their early 20s who have no health issues and no dependents). I found out that whole life insurance is not an investment, and if it is, then it’s a pretty lousy one. I found out that I probably don’t need two different life insurance policies at the age of 22 with no dependents.

My point is, there are certain people passing themselves off as "financial planners," "financial advisors," or "financial whatever" who tell you that they want to make sure you’re financially secure and would only want to advise you to do things that are in your best interests. These people are snakes, but somehow, they are able to legitimize themselves behind a big company. I’ve heard that a lot of them target younger people and use fear to convince them to buy a bunch of insurance they don’t need.

Just be careful, fellas, and do your own research.

My husband’s family has used a boutique firm of financial advisors for years, and honestly, they are probably the best of the best. Independent, fee-for-service—they are very good at what they do. However, I still have some massive issues with them.

Essentially, they have overcomplicated everyone’s finances to a point where the family is now reliant on them for everything. They could probably never extract themselves from their services even if they wanted to. I think this is their ultimate business model. My in-laws have a highly complex portfolio of 30-40 investments (shares, managed funds, etc.), and yet their fund grows less than my simple VAS/VGS portfolio. They pay these guys something insane like $30K per year in fees.

The same firm took on my sister as a client, despite her having extremely simple and minimal finances, charging her $5K per year for insurance and tax advice and complicating her super and other things to the point that now she can’t manage it by herself. I think they honestly should have told her she didn’t need a financial advisor.

Prior to learning about finances and “going it alone,” they had my husband involved in several managed funds that were charging him 1.5% per year and making around 5-6% before fees. Way worse than a simple ETF. I worked out that his money grew about half the amount it would have if we had just been using ETFs from the beginning. And yet, when we mentioned our change of plan, they still recommended we didn’t go with ETFs and stayed with the managed fund. It didn’t make sense.

Again, my theory is simply that they don’t charge commissions on these things, but by having them manage our money and invest into funds for us, they can charge us fees for service and keep things sufficiently complex so we need to keep using them year after year. I think it’s all a bit of a rort, really.