What are some signs that your financial advisor is stealing from you?

A recent series of encounters with a "financial planner" would be funny if it wasn't so predictable. I have a reasonably healthy amount of money in the care of the investment department of a regional bank. The new "financial planner" at the bank apparently noticed this money, and started to send me emails pitching me on---wait for it--single-premium life insurance. His idea was that I could use the money to "build a family legacy that will last for generations" Barf.

It would be funny if it wasn't so predictable. I had to meet with him about changing some investments within my SEP/IRA. In the meantime, he was helping me set up a Donor Advised Fund. This is a fairly labor-intensive process, with no immediate benefit to him or his bank, and he was taking care of every step of it for me. If the process of setting up the Donor Advised Fund had involved him wiping my backside, he would have done it with smile, while asking me whether I preferred Charmin or AngelSoft.

Two days ago, we met at my office. After we did the necessary stuff for my SEP/IRA, he turned to the life insurance pitch. I cut him off and said, "If this is about life insurance, I'm not doing it." At that point, he left my office. Yesterday morning, bright and early, I got a email from him giving the contact information of various people who I needed to talk with to finish setting up the Donor Advised Trust, along with his sincere best wishes that I could successfully complete the task on my own.

As long as he saw me as a live prospect for high-commission financial products with high internal costs, he was willing to wait on me hand and foot. Once the prospect of selling me life insurance was over, I was "dead to him." Again, it would be funny if it weren't so predictable. Something to keep in mind concerning the priorities of "financial planners." (Hint: It 's not you.)

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.

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.