Quote:
Originally Posted by BlueStarAirlines
I don't think that is it. I think a lot of people want the personal touch that a small time local advisor can offer. Unfortunately, that sometimes equates to less oversight or the advisor taking liberties that wouldn't be tolerated at a larger firm.
Just my opinion, but if one is paying AUM (assets under management) or any brokerage\commissions you have the potential to be taken advantage of. There are many flat-fee fiduciary advisors that will guide without being tempted by commissions and churning accounts.
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Yes, but perhaps the reasons for hiring these small firms goes beyond wanting that personal touch. Is it too much to ask that a basic course in financial literacy be mandatory in high school? Topics could include learning to balance a checkbook, understanding amortization schedules and compound interest. Also, the pitfalls of debt and having a basic knowledge of bonds, stocks, mutual funds and IRA’s. Not an in depth dive but at least an introduction to these terms.
People need to realize that these free dinner offers are nothing more than a sales pitch. Instead of selling used cars they are selling annuities, life insurance and, at times, truly bizarre and risky products (GWG bonds, etc). Often, the salesmen are enriching themselves with fat commissions and have little concern for your financial health.
Am I suggesting people should be cynical and assume that anybody asking you to write a check may have ulterior motives? Yes, that is exactly what I am suggesting! While there are businesses that will treat you with respect and put your interests first, how can you tell the difference? The answer is due diligence including checking references along with license verification and NEVER paying prior to services rendered. Try to learn everything you can about the product being sold and get a second opinion. Never be shy about saying “NO” and walking away.