"Financial Planners"--the grifters of the business world

I had set aside some money to invest into stocks. So opened an account with Internaxx bank and took out a cheap subscription under a special offer with the Porter Stansberry tipping sheet.

It was around 2010 and I did remarkably well, quickly building up a nice little portfolio and collecting dividends and watching as the values increased. What could go wrong? I had a phone call from some broker in the UK who specialised in pre IPO stocks and floatations so listened and the guy explained how using CFD’s you could leverage up your position and take control of a much bigger slice of the action and make a huge amount of money…….. I think some rich guy like Warren Buffet once said if you do not fully understand what you are investing in just give it a miss. So a new account was opened and I started off making my fortune.

Well no, I ended up with a black hole which had these things called margin calls which gobbled up cash like there was no tomorrow. I quickly realised that this was not working and bailed out pretty quickly but then got into leveraged trading on gold……… It was an interesting 6 months and taught me that I was not really understanding what was going on and I would never cut it as a trader so there was something positive at least.

I’ll preface that this is more of a rant and confession than anything else. I am a 29 year old “financial planner” for a major brokerage firm that I have been with for 7 years now. I am always so impressed as I scroll through this sub the savviness of the average poster - from saving strategies, bogle head inspired investment strategies, and the overall effective simplicity. In my day job as a “planner” (salesman) we are taught to muddy the waters, complicate the process, and create fear to sell simplistic and unnecessary financial services. I wish I could give real advice ( max out, index, save, etc) but that simply won’t pay the bills. Saving aggressively, maxing tax deferred accounts, and indexing is a simple yet the most effective strategy that anyone can do.

It gives me quite the morale dilemma of pursuing a career in something I don’t believe there’s real value in. In my opinion, for 95+% of folks there is no need for a financial planner/advisor. The only real value in paying for any type of financial service I see is a tax advisor for those in complex situations; but there is simply no need for a financial advisor. I love the planning side of my career, but absolutely hate the sales side, which has stalled my career progress because I have turned down promotions to avoid the majority of my income becoming commission based and to stay in the space of helping rather than selling, which is hurting my own income / FIRE goals.

If I could go back in time, I would have become a CPA or perhaps an estate planner - where real value can be provided. Anyways, I know I am preaching to the choir here but, don’t get sucked in by a financial planner/advisor.

Both of my parents saved their money with one of the giants in this field (as tempting as it is, I will not name them). When you visit their offices, there is lots of polished wood, hushed tones, and big conference rooms as they very seriously do their job of turning the assets entrusted to them into more money.

I was executor for both of my parents' estates (they were divorced), so I got an up-close-and-personal look at what the investing company was doing, but only after the fact. My father thought of himself as a savvy investor, so he managed his money himself. He was, in reality, the epitome of the “Poor Dad” and couldn’t find a good investment with a flashlight, a compass, and someone pointing him right at it.

My mother was the polar opposite; she totally trusted this investment company. Over more than 50 years, they both managed their retirement assets this way. While my mother “won” this race because she had more money when she passed, the fact is that if you look at how much money she handed over to them and how little they actually did with it, it’s just sad.

When it was time to unwind her accounts, she was diversified to the point of “diworsification." There was no rhyme or reason for what she was invested in. It was as if the plan was to see if there was a possibility to buy a little bit of everything. She was in every high-load mutual institutional fund you could possibly find, and a smattering of international institutional funds as well. What a mess.

They wanted to hand this over to the heirs as-is and not sell any of it. I insisted they cash all of this mess out and only transfer the money to the heirs. They did this for everything except her IRA, which they transferred as-is. I received $13,000 (give or take) worth of 20 different mutual funds. That’s just nuts.

So, don’t be swayed by the big conference rooms and the fancy offices with their name on the top of the building. These folks are totally in it for themselves, and if they make you some money, it was by accident.