The “Telling the Truth is Optional” Advisor
I had a client who was retiring, and we were in the process of rolling over his 401(k) and pension. In our conversations, I learned that he had purchased a fixed annuity at his local bank a couple of years prior.
Since they wanted to consolidate all of their investments, they were more than comfortable transferring everything to me – but I knew that they had just taken out the fixed annuity a couple of years prior.
My inclination was that there was probably some type of surrender charge attached to it. I inquired about this to the client, and they were under the impression that there was not a surrender charge and that they could take their money; principal and interest, and walk away at any time.
Why did they believe that you ask? Because that’s what the advisor had told them. The advisor had told them they could take out the investment, take their guaranteed interest at any time, and walk away with everything without penalty. Now, once I heard that, as much as I wanted to believe them, I knew something sounded fishy. I had them call the bank and talk to the advisor to clarify how it actually worked. As it turns out, it wasn’t that way at all.
Yes, they could walk away with the principal, but all the interest that they accrued would be forfeited, and in their case, it was approximately $7,000 that they’d be leaving on the table.
Obviously, we weren’t about to give up a big chunk of money just for the sake of consolidating, so we left it as-is to revisit when the surrender period expired- which was four years away! Lesson Learned:Just because the advisor tells you something doesn’t necessarily mean it’s true. If something sounds too good to be true, ask for it in writing.
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Fee Overload: How I Was Sold a Costly Pension Plan with Hidden High Fees and Poor Performance
I went to see one about setting up a private pension because I don't get one through my employer (employed through an offshore company). Got charged about 150 quid for them to go away and "research" some options for me (probably very little research to be done; they already have a standard set of funds that they use through Openwork). For the first year they wanted 35% of my contributions.
The fund that they "found" for me (something Graphene, can't remember the name of it and I'm not at home to check) consisted of several individual funds to apparently lessen the risk of a single fund manager going to shit. In total the funds consisted of about 70% UK equities (why?), had rubbish past performance when compared to a global index tracker and would've cost me well over 2 or 3% per year (can't remember the exact number sorry), plus about 1% per year to the financial advisor for "management" after the initial 35% for the first year.
Financial advisors are very annoying
Does anybody else find cold calls from financial advisors extremely annoying? I have 3 accounts.
Schwab holds retirement accounts and it does what I need it to do. I use TD as a brokerage and it does what I need it to do. They fulfill their purpose and never bother me and are great. But I also have bank account w Bank of America / Merrill lynch and I get a call from them every week from a different dillhole offering me his financial services and I find it so annoying and violating bc I know what’s happening is that these back office bungoles are looking at my accounts and holdings, which is targeting me as a good call for their prospecting.
It’s like I’m paying them to upsell me on their services, which they have never actually are able to explain why I need
My financial advisor seems to ghost me, is this normal?
My partner put 50k into investments via a well known financial services company during Covid and saw a decent profit (unexpectedly quick, but that’s Covid I guess). We have only seen shrinkage since then.
I put about 100k down about 2 years ago, it has only dropped since. My FA has never spoken to me, in fact he moved off my account without telling me, and the new advisor didn’t even intro themselves. When me and my partner tried to get time to speak to the new person it took weeks.
When we eventually got them on a call they were fine but didn’t give us much concrete, there were follow ups to be done, the FA has not followed up in 3 weeks. I emailed a week ago asking for a date for these, no response. Is this normal for FAs? In my industry I would be fired immediately by my clients for this level of service (specifically talking about the service not the profit on the investments as I’m aware that’s a long game).
Are all FAs generally incredibly slow and hard to reach? I ask as this person belongs to a large reputable firm. This far they have taken my money and charged me fees despite my investment never generating profit and never speaking to me either. While my wife has had slightly (she has spoken to the advisor once before I invested) better service, and had profit a while ago, the service is so poor.
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