Trading My 401k for a Questionable Insurance Policy
It was once suggested to me by a “financial advisor” to cash out my 401k and reinvest it into a whole life insurance policy.
Related Horror Stories
Trading My 401k for a Questionable Insurance Policy
It was once suggested to me by a “financial advisor” to cash out my 401k and reinvest it into a whole life insurance policy.
The “I Like to Churn” Advisor
And no, we’re not talking about churning butter. I was talking with another potential client who was considering switching advisors and although they lived in a small town in the Midwest, they had somehow started doing business with an advisor out of New York. They had been with this person for several years and had a hunch that things weren’t all what they seemed.
They thought perhaps the advisor was selling funds and buying other funds just for the sake of earning a commission, and since I was the guy they were considering hiring, they were interested in me taking a look. After reviewing their account statements and the trade confirmations, it was quickly and easily obvious that was what was being done.
Sure enough, the advisor was selling A-Shares; another type of mutual fund, and turning right around and buying other B-Shares, sometimes it was the exact same fund. It made no sense other than the fact that the advisor made a commission on each of those trades.
Lesson Learned: If you are using an advisor on a commission-based relationship, be on the lookout for an influx of unusual trade confirmations. If you see a lot of activity, it might be worth inquiring about.
Pushed to the Edge: How Three Financial Advisors Tried to Sell Me High-Risk Investments I Didn't Need
Had three different independent FAs try to sell me into high risk VCTs (despite being wholly inappropriate for my goals / financial position) - all I wanted was some one-off financial modelling that I couldn't figure out in a spreadsheet. I literally gave up trying to find an FA at that point.
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