Thursday, July 24, 2014

Why I Don’t Trust Many Financial Advisors

I am often asked, “Why have I taken such a stance against commissions and those that sell financial products?”

Most Financial Advisors in my area (on some level) are financial product salesmen. They earn a significant portion of their income selling loaded Mutual Funds, life insurance, and/or annuities.

What’s wrong with commissions? What’s wrong with selling financial products? 

I have no problem with commissions. And I have no problem with those who are honest and admit they are Financial Sales people. 

My problem lies with those who try to pretend they are an Advisor or a Planner when in fact their hidden agenda is simply to sell you financial products.

If your Financial Advisor must get you to purchase a particular product to earn their living, how do you know if they are looking out for you or their wallet?

Mutual Funds Truths
Many No Load mutual funds are better than mutual funds with a commission. Has your salesperson ever told you this?

Many Broker sold mutual funds have very high annual expenses. Has your salesperson ever talked to about how much high mutual fund expenses will rob from your retirement?

Annuity Truths
Variable Annuities that pay a commission can cost you 3-4 times as much as a commission-free Variable Annuity. Has your salesperson ever told you this?

Index Annuities: in my opinion, there are way too many lies being told about Hybrid or Index Annuities to mention here. Just remember, you can’t have your cake and eat it too!!!

A Word of Caution
All Financial Advisors have a choice (yes, your Advisor has a choice). A choice to sell financial products on commissions or not. Stop and think… Why do most Advisors continue to operate their businesses by way of commissions when they have a choice?

All financial products have good and bad. ALLLLLL!!!! Depending on your situation, many products have more bad than good. Don’t you think you deserve to know the truth?

If you aren’t working with a Commission-Free / Fee-Only Certified Financial Planner chances are you will never hear about many of the negatives with most financial products. 

I see examples of the above almost every week.

And that’s why I don’t trust many financial advisors.