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Interesting article on the plethora of questionable financial advisors and the insurance industry's eagerness to hire them as commissioned sales agents.

http://www.nytimes.com/2007/07/08/business/08advisor.html?_r=1&hp=&adxnnl=1&oref=slogin&adxnnlx=1183867779-IzJz6Kf9j8I3ThKnCBUnEg

Elderly clients thought they had every reason to trust Michael DelMonico as a financial counselor. After all, the Massachusetts insurance agent had become a certified senior adviser in 2002, a credential he made sure to advertise on fliers sent to retirees.

He did not mention how easy it had been to get that title.

He had paid $1,095 for a correspondence course, then took a multiple-choice exam with questions like, “Marketing can best be described as:” (The answer: “The process or technique of promoting the sale or distribution of a product or service.”) Like more than 18,700 other applicants since 1997, he passed.

Insurance companies, eager for sales representatives, embraced Mr. DelMonico, as they have thousands of other newly credentialed advisers. The following year, insurers paid him commissions worth $720,000 as his business with retirees soared.

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No wonder so many smart and savvy people immediately associate the words "financial advisor" and "insurance company" with some kind of scam.

intercst
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No wonder so many smart and savvy people immediately associate the words "financial advisor" and "insurance company" with some kind of scam.

If it walks like a duck, quacks like a duck, and looks like a duck....

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As long as the term 'financial advisor', 'financial planner', 'wealth advisor' and other such similar terms remain unregulated, it'll be 'Caveat Emptor'.

BruceM
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As long as the term 'financial advisor', 'financial planner', 'wealth advisor' and other such similar terms remain unregulated, it'll be 'Caveat Emptor'.

The real issue is that anyone with the intelligence to do the proper background research on a financial advisor has the intelligence to act as his own financial advisor. In fact, a lot of people who are not capable of doing the background research have the capacity to act as their own advisors.
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In fact, a lot of people who are not capable of doing the background research have the capacity to act as their own advisors.

A complete numbnut can read from a cheat sheet and say: "You need a annuity," or "You need a diversified portfolio of mutual funds," or "You need whole life." The bottom line is that you'll end up in the highest fee investment with the lowest possible return that the advisor could sign up with as an agent. As for the so-called independent advisors, they know what anyone can figure out for themselves with a little bit a reading. I'm sorry, but the financial services industry is almost a complete fraud, and most of the folks involved belong in jail.

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A complete numbnut can read from a cheat sheet and say: "You need a annuity," or "You need a diversified portfolio of mutual funds," or "You need whole life." The bottom line is that you'll end up in the highest fee investment with the lowest possible return that the advisor could sign up with as an agent. As for the so-called independent advisors, they know what anyone can figure out for themselves with a little bit a reading. I'm sorry, but the financial services industry is almost a complete fraud, and most of the folks involved belong in jail.

Your biases are really hanging out there.

IF
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Your biases are really hanging out there.

It's really my personal opinion. I've known many, many people who have used financial advisors, either insurance folks, financial planners, brokers, or whatever. In every instance, they've been sold a bill of goods that aren't in their best interests, but that are in the best interests of the person giving the advice. The folks I'm talking about who got scammed are high earners, usually with graduate degrees. They end up paying huge fees and getting low or below average returns, with high annual expenses. The stock brokers and insurance agents are the worst of the group. I particularly hate the way these so-called experts rip off the elderly by praying on their fears of going broke. Enough said. Yes, my opinion of these scammers is really hanging out there, but there's a good reason for it being that way.
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It's really my personal opinion. I've known many, many people who have used financial advisors, either insurance folks, financial planners, brokers, or whatever. In every instance, they've been sold a bill of goods that aren't in their best interests, but that are in the best interests of the person giving the advice. The folks I'm talking about who got scammed are high earners, usually with graduate degrees. They end up paying huge fees and getting low or below average returns, with high annual expenses. The stock brokers and insurance agents are the worst of the group. I particularly hate the way these so-called experts rip off the elderly by praying on their fears of going broke. Enough said. Yes, my opinion of these scammers is really hanging out there, but there's a good reason for it being that way.

I've read your opinions about financial advisors over the years. Your focus seems to be on investing. Financial planning is more than just investing. (It may be buzman that says that often in response.) There may be insurance concerns. There may be estate planning concerns. Financial planning is just not buy an index fund and forget it.

IF
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I'm sorry, but the financial services industry is almost a complete fraud, and most of the folks involved belong in jail.
------------------------------------------------------------------------

Maybe the Current Occupant would pardon them.

buzman
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insurers paid him commissions worth $720,000 as his business with retirees soared.

Wow.

I need a new title.
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