Securities Research Services
4 Things Your Financial Advisor or Planner Doesn't Want You to Know1. Your financial planner or advisor is primarily an insurance salesman.
While insurance certainly has its place in your portfolio, your financial planner or advisor is likely to determine that your entire portfolio be placed within repackaged investments that are essentially just universal life or variable universal life policies (VULs). Hidden fees and commissions: For more complicated and longer-term investments, which again are likely to be repackaged VULs, like limited partnerships, the financial planner or advisor firm may collect large management fees. More commonly, larger financial planner or advisor firms may pay financial planners or advisors more for selling the firm's proprietary insurance and mutual fund products. Most likely it will consist of a mutual fund owned within a VUL Your financial planner or advisor gets a residual payment in addition to his commission on most of these policies. This means he or he or she earns a percentage as long as you continue to own the policy. Insurance as the only solution: If you were a financial planner or advisor and your boss paid you 80% commission on a first year policy and then a residual income of 10% commission each year after, wouldn't you find reasons to find an insurane solution to every single financial challenge your clients face?
2. A financial planner or advisor's main qualification is that he can sell. Other types of incentives also increase conflicts of interest with your financial planner or advisor. When a financial planner or advisor transfers to a new firm, he may be offered, in addition to a signing bonus, a higher sales commission for the first month or year. You can imagine the incentive that financial planner or advisorhas to sell as much product as possible before her commission Similarly, at the end of the year, many firms pay their financial planner or advisors based upon the percentage of commissions they generated that year. The more commissions earned that year, the more the financial planner or advisor generates, the more money he is paid at the end of the year. There’s a natural race to try to generate more commissions at the end of the year based on this higher payout. One of the worst examples is the sales contest. Financial planner or advisor firms will load financial planner or advisors with gifts, including trips or just extra money for selling more of a particular product during a given time period. Rarely, if ever, are you the client made aware of this. Even the most naive investor would think twice about buying an insurance package if he were told that one of the reasons the package is being suggested to him is because some financial planner or advisor can win a trip to the Grand Caymans. 3. Your financial planner or advisor puts you at way too much risk. Financial planner or advisors are famous for telling you to systematically buy and hold securities no matter the market conditions. This is because they care only about selling you a product in their inventory and because they don't understand the market contions themselves. Testing this buy and hold strategy is as easy as looking at a 10-year NASDAQ chart. If you had bought in 1997 you would be sitting on a loss by 2002. |
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drops to a lower percentage.
If you were unlucky enough to have bought a mutual fund in 2000, and many were because financial planner or advisors had big incentives then to unload their inventories, you would still be suffering a loss seven long years later.
A simple treasury bond would have outperformed this record and would have at least kept up with inflation
Smart Money Principle(TM)
Starting with $10,000, each successful trade you make 10% and for your unsuccessful trades you lose 2%-3% each.
Trade 1 = $1000 profit
Trade 2 = $1000 profit
Trade 3 = $200 loss
Trade 4 = $300 loss
Total = $1,500 profit
4. Anybody can be a financial planner or advisor.
Anyone can be a financial planner or advisor, including your milk man or your used car salesman. All it takes are a few simple-to-get government liscences. Many financial planner or advisors enter a five-day study course, pay their fees, take the tests and it’s off to sales training.
Yes, that's right. Sales training. Financial planner or advisors don't have time to really learn real financial planning strategies when sales quotas are beckoning.
As crazy as it sounds, literally no other qualifications are required. Financial planners or advisors are not required to be college graduates. More often than not, financial planners or advisors are not trained beyond the simple insurance repackaging strategies their firm pushes them toward and they have no idea what the best strategies really are for your money and your financial planning needs. What are important are sales quotas and commission rates and that makes up 90% of their focus.
Do you want to take financial advice from your milk man? The fact is, your milk man really can become a financial advisor or planner and could very well be the guy managing your money if he only decides to go out and take a couple of tests. But since your milk man doesn’t care about your finances any more than you care about his, we have one simple question to ask.
Why not you?
No, we are not suggesting you go out and take the Series 7, 63 and 65 and become an insurance salesman/financial planner or advisor. We are suggesting, however, that you
take more of an initiative in managing your own future. You are the only one who can look out for your own best interests without any troubling conflicts of interest.
You are the only one who does not have a conflict of interest. And you really can do it. It’s not as difficult as you may think. It is possible to earn outstanding returns on your money, manage risk, and avoid the hidden pitfalls of buying at the top of the market or selling at the bottom the way your financial planner or advisor may inadvertantly advise you to do.
Stop accepting paltry returns that are eaten up by your financial planner or advisor's commission and conflicts of interests: Your financial planner or advisor tries to get you to accept returns of 7% - 12%, which could be ok, but why should it take you a year to earn them?
You work hard to earn your money, but how much time do you spend actually managing your money? The simple truth is that you spend 40 hours a week or more going to work. You spend a an hour or two per week taking care of the yard. You spend an hour or more per day preparing dinner. You spend two to three hours per day watching TV. How much time to you spend planning for your future?
Do you know that if you are willing to put aside just a few minutes a day that you can start earning returns on your money that dwarf anything your financial planner or advisor promises you? Do you know that by spending just a few minutes each day that you can manage your risk much better than your financial planner or advisor can? It is no secret. The strategy is simple and if you take the time to learn, it will make sense to you.
Take a free trial and see how we can help you fire your financial planner or advisor and master the market on your own: