[manaboutown]

This is an extraordinary 2012 study that confirms my belief that some if not many financial advisors are primarily commission driven and act in their own self interests to generate fees, ahead of the best interests of their clients. The paper is quite detailed and lengthy, containing disturbing findings IMO.

"Do financial advisers undo or reinforce the behavioral biases and misconceptions of their clients? We use an audit methodology where trained auditors meet with financial advisers and present different types of portfolios. These portfolios reflect either biases that are in line with the financial interests of the advisers (e.g., returns-chasing portfolio) or run counter to their interests (e.g., a portfolio with company stock or very low-fee index funds). We document that advisers fail to de-bias their clients and often reinforce biases that are in their interests. Advisers encourage returns-chasing behavior and push for actively managed funds that have higher fees, even if the client starts with a well-diversified, low-fee portfolio."

The actual paper is in a PDF.

The Market for Financial Advice: An Audit Study | NBER

[village dreamer]

ha , ha , ha.......

[Boomer]

I don't know what percentage of advisors have disclosures. I realize there are varying types of disclosures, some more serious than others. I would not want an advisor to have any,

I don't know if advisors are obligated to tell their clients if they have had a disclosure.

But "Broker Check" on finra.org is where you can find out if an advisor has a disclosure and if there has been a settlement, it will show that, too. You can also read a summary there of what happened,

If hiring an advisor, use Broker Check to see his pedigree.

Boomer

[retiredguy123]

Originally Posted by Boomer

I don't know what percentage of advisors have disclosures. I realize there are varying types of disclosures, some more serious than others. I would not want an advisor to have any,

I don't know if advisors are obligated to tell their clients if they have had a disclosure.

But "Broker Check" on finra.org is where you can find out if an advisor has a disclosure and if there has been a settlement, it will show that, too. You can also read a summary there of what happened,

If hiring an advisor, use Broker Check to see his pedigree.

Boomer

I think that an advisor who is selling annuities should be required to tell you that it is an "annuity" and not a retirement investment. Some annuity salespeople totally avoid using the word annuity. Also, they should be required to provide you with a copy of the entire annuity contract to read before you give them any money. It is absurd that advisors are allowed to sell annuities without identifying the product, or even allowing clients to read the contract.

[manaboutown]

This confirms my decision to go only with a fee-only fiduciary if and when the time comes. He/she can have no skin in the game based upon my investible assets.

[MightyDog]

ANY professional that works on a commission basis will have their ability to eat and pay their rent/mortgage as a primary factor driving their efforts. It's just a simple reality - much as we might not like it. It's important to be aware of it.

Myself being in real estate buying mode currently, I have been amply reminded of that reality. Anyone buying a car, home addition, insurance, ETC, ETC. needs to also keep it in mind.

Originally Posted by manaboutown

This confirms my decision to go only with a fee-only fiduciary if and when the time comes. He/she can have no skin in the game based upon my investible assets.

This makes sense. But, also something to realize, is that depending how it's set-up, the advisor could also be getting a commission cut from the type of fund, etc. that they are recommending, in addition to their fee. A double-dipping, of sorts.

The optimal scenario, seems to me, is to have an independent, fee-based advisor who puts together a specific plan for an investor and that investor executes the trades at their own brokerage house.

[Pballer]

Beware of the investment firm of Churnem and Burnem.

[justjim]

Here we go again. There is a place for an annuity for some clients just as there is a place for life insurance. A guaranteed monthly income from an annuity could be what “the doctor needs to order” for some clients. Just because a financial advisor sells annuities doesn’t mean that he/she is doing something wrong for their clients. Not every client can handle the “ups and downs” of the stock market. Some absolutely panic when they start to lose money in their stock portfolio. That said, there are excellent financial advisors and some not so much. You can say the same for doctors, lawyers, electricians, plumbers and yes even landscapers. Even putting your money in an interest bearing bank account is better than putting it under the mattress. Wait, some don’t trust banks either.

[retiredguy123]

Originally Posted by justjim

Here we go again. There is a place for an annuity for some clients just as there is a place for life insurance. A guaranteed monthly income from an annuity could be what “the doctor needs to order” for some clients. Just because a financial advisor sells annuities doesn’t mean that he/she is doing something wrong for their clients. Not every client can handle the “ups and downs” of the stock market. Some absolutely panic when they start to lose money in their stock portfolio. That said, there are excellent financial advisors and some not so much. You can say the same for doctors, lawyers, electricians, plumbers and yes even landscapers. Even putting your money in an interest bearing bank account is better than putting it under the mattress. Wait, some don’t trust banks either.

If you are correct, why can't the annuity salesperson tell you that you are buying an annuity, and why can't they give you a copy of the annuity contract before you give them your money? I learned a long time ago that you should never agree to a contract until you read it.

Have you seen the TV commercials where Ty Young is selling annuities? He is selling annuities, but he never says the word "annuity" in the entire commercial.

[Eg_cruz]

Originally Posted by retiredguy123

I think that an advisor who is selling annuities should be required to tell you that it is an "annuity" and not a retirement investment. Some annuity salespeople totally avoid using the word annuity. Also, they should be required to provide you with a copy of the entire annuity contract to read before you give them any money. It is absurd that advisors are allowed to sell annuities without identifying the product, or even allowing clients to read the contract.

Anyone can ask for a copy of a policy.
FYI not all annuities are bad in fact there are some very goods ones.
Not all investors/ agents are bad
Fixed / Fixed-Index Annuities have a place in most portfolios just like stock, EFT’s and MF’s. You just have to have the right agent with the right annuity one with no riders, no fees and no crap just straight forward annuity.

[Eg_cruz]

Originally Posted by retiredguy123

If you are correct, why can't the annuity salesperson tell you that you are buying an annuity, and why can't they give you a copy of the annuity contract before you give them your money? I learned a long time ago that you should never agree to a contract until you read it.

Have you seen the TV commercials where Ty Young is selling annuities? He is selling annuities, but he never says the word "annuity" in the entire commercial.

They can get a copy of a policy and there is no way you can buy annuity without you knowing, you have to sign a 20 page application. If you’re signing an application and you have no clue that that’s in Annuity I don’t know what to say there.

[Eg_cruz]

Originally Posted by justjim

Here we go again. There is a place for an annuity for some clients just as there is a place for life insurance. A guaranteed monthly income from an annuity could be what “the doctor needs to order” for some clients. Just because a financial advisor sells annuities doesn’t mean that he/she is doing something wrong for their clients. Not every client can handle the “ups and downs” of the stock market. Some absolutely panic when they start to lose money in their stock portfolio. That said, there are excellent financial advisors and some not so much. You can say the same for doctors, lawyers, electricians, plumbers and yes even landscapers. Even putting your money in an interest bearing bank account is better than putting it under the mattress. Wait, some don’t trust banks either.

All true

[retiredguy123]

Originally Posted by Eg_cruz

Anyone can ask for a copy of a policy.
FYI not all annuities are bad in fact there are some very goods ones.
Not all investors/ agents are bad
Fixed / Fixed-Index Annuities have a place in most portfolios just like stock, EFT’s and MF’s. You just have to have the right agent with the right annuity one with no riders, no fees and no crap just straight forward annuity.

Totally not true. I have personally asked several annuity salespeople to send me a copy of the annuity contract when trying to advise friends about them. They have never agreed to give me the contract. In fact, they absolutely refuse to provide it. Their policy is to collect the money from the client, and then to send them a 100+ page contract and an agreement to refund their money if the client wants to rescind the contract within 30 days. I have been cussed at and hung up on by annuity salespeople for merely asking to read the contract.

[retiredguy123]

Originally Posted by Eg_cruz

They can get a copy of a policy and there is no way you can buy annuity without you knowing, you have to sign a 20 page application. If you’re signing an application and you have no clue that that’s in Annuity I don’t know what to say there.

The application is not the annuity contract. The application may be 20 pages, but the annuity contract is more than 100 pages, and you will never see it until you have paid your money. I have reviewed several friends' investment portfolios where they had no idea that they had purchased an annuity. And, you cannot get a copy of the annuity contract until you pay your money. I have tried several times, and the salespeople absolutely refuse to provide a copy of the contract. They actually get angry when you ask for it.

[Eg_cruz]

Originally Posted by retiredguy123

Totally not true. I have personally asked several annuity salespeople to send me a copy of the annuity contract when trying to advise friends about them. They have never agreed to give me the contract. In fact, they absolutely refuse to provide it. Their policy is to collect the money from the client, and then to send them a 100+ page contract and an agreement to refund their money if the client wants to rescind the contract within 30 days. I have been cussed at and hung up on by annuity salespeople for merely asking to read the contract.

Sorry about that for you
I have been an agent for 24 years so if I tell you, you can get a copy of the policy I telling you the truth. I have given to clients when they ask.
I am sorry you had a bad experience but just like not all car salesman’s are bad same goes for annuities