How to Fire your Financial Advisor

 If you want to switch advisors, here is detailed advice from

Elliott Appel, CFP®, CLU®, RLP®

https://kindnessfp.com/fire-your-financial-advisor/

Thinking about hiring a financial advisor? Considering switching advisors?

 Here are some links to articles to help you find such assistance. Thanks to Michelle Singletary, personal finance writer for The Washington Post.

What You Need to Know About Fee-Only Financial Advisors

Fee-Only Financial Planner vs. Fee-Based: What’s the Difference?

Financial adviser, financial planner or robo-advisor? Here’s how to find the right help to manage your money

Maybe your financial "adviser" has been taking advantage of you

"The Securities and Exchange Commission's program to persuade investment firms to self-report conflicts of interest has led to a settlement under which 79 firms return $125 million in fees to clients. The firms placed clients in share classes with expenses higher than those in other share classes available without disclosing that fact." (Retirement Security SmartBrief)
"Advisers to Repay Fund Investors" by Dave Michaels in The Wall Street Journal (3/12/19) states that 79 investment advisory firms have agreed to pay $125 million to clients thwo were over charged for their investments.
If you are not familiar with the term "fiduciary" then it's time to search this blog and educate yourself.
These "advisers" sold high cost mutual funds to their clients in order to boost their own earnings or qualify them for earning prizes like vehicles and trips. These practices have been around for as long as the industry has been selling financial products. Equally suitable lower cost funds were available for these clients who ended up earning less on their investments due to the difference in fund costs.
Top of the list is Wells Fargo, the "king" of egregious consumer practices. Why does anyone still do business with Wells Fargo? Deutsche Bank is also involved in this settlement.

So you think you're a good judge of financial advice?

The vast majority of financial advisers do not take advantage of their clients. BUT... "About 7 percent of U.S. advisers have misconduct records in civil or regulatory proceedings." And previous studies have shown it is easy to cover up these bad records.
Squared Away Blog's author Kim Blanton explains the study:
"A new study finds that various things can trip people up and make them trust an adviser who is giving out bad advice. These influences included a good first impression of the adviser. And one way for an adviser to make a good first impression is by initially confirming the client’s own views on investing before introducing poor advice."
Why give bad advice? Advisers who are not fiduciaries may have an incentive to recommend costly products that pay them a high commission or qualify them for bonuses or other incentives like trips to Hawaii.
"The subject of this study – judging the quality of financial advice – is important at a time workers are carrying a heavy load of responsibilities for managing their 401(k) accounts, and the accounts are becoming more critical to their retirement outlook."
Read the summary of the study and its conclusions at: https://squaredawayblog.bc.edu/squared-away/are-we-able-to-judge-financial-advisers/
And heed Kim's conclusion after reading the academic study: "Left to their own devices, the public’s financial acumen is generally poor, and a good adviser will steer them toward sound decisions. But this research indicates that investors can get into trouble if they aren’t able to detect when they’re getting bad advice."
So be skeptical, educate yourself (using this blog), and get a second opinion, just like you would before major surgery.

Surprise -- There's a Good Chance Your Broker Is Ripping You Off

"Good financial professionals can help us grow our nest eggs, save money on taxes, and plan effectively for the future. But lousy ones can really hurt us -- and apparently there are a lot of them out there." "It's reasonable to be intimidated by the world of investing as, after all, few of us ever learned much about it in school. Thus, it can seem as if a reasonable and safe thing to do is to seek out professional guidance or to simply accept professional advice that's offered. According to a recent study, though, it turns out that's not such a safe move."The report,  titled The Market for Financial Misconduct "examined the records of more than a million financial advisors and former financial advisors between 2005 and 2015 and learned that a shocking 7% of them -- 87,000 in total -- had been disciplined for misconduct or fraud."
"Note that the 7% represents those that were misbehaving and discovered. The percentage of total misbehavers is likely significantly higher, as those who were never caught are not included in the 7%." Read  more at:  http://www.fool.com/investing/general/2016/03/09/surprise-theres-a-good-chance-your-broker-is-rippi.aspx

Questons to ask a financial adviser

 - How long have you worked in financial services and in what capacity?

-  What is your academic training–undergrad and grad school?

-  Have you earned either your CFA and/or CPA designations? or CFP (Certified Financial Planner)

-  What kind of continuing education are you engaging in to stay abreast of developments in your field?

-  Do you work under a suitability or fiduciary standard?

-  Do you utilize an active or passive/evidenced-based approach & why?

-  What fees are your clients charged–all in, from your fee down to embedded fees such as markups on fixed income purchases to management fees on recommended funds?

-  Who manages your money & what debt do you carry personally?

Manisha Thakor (@ManishaThakor) is founder and chief executive of Santa Fe, N.M.–based MoneyZen Wealth Management LLC.

Brokers Fight Rule to Favor Best Interests of Customers

If you think your broker or financial “advisor” has your best interests at heart, think again. “David O’Brien, a certified financial planner, has tried to repair the retirement portfolios of several victims over the years. There was the high school science teacher who didn’t realize she had been sold a variable annuity, where layers of incomprehensible fees devoured nearly 2.5 percent of her retirement savings each year. Then there was the woman fighting cancer, who was also sold a high-cost annuity, but whose underlying investments were tied up in a money-market type fund — one that cost 1.5 percent annually.”  “Brokers are not necessarily required to act in their customers’ best interest, even if they are advising on their retirement money. While that would seem to be a basic consumer protection, in Washington and on Wall Street it has proved to be wildly contentious.” Don’t deal with any financial professional who doesn’t have a fiduciary responsibility to put your interests first. Tara Siegel Bernard explains the details in the New York Times:  http://www.nytimes.com/2014/06/13/your-money/rule-to-make-brokers-act-in-clients-interest-still-pending-after-4-years.html?ref=your-money

You Probably Have No Idea What You Pay Your Financial Advisor In Fees

"Most people have an idea of what they’re being charged for a service, but just like phone bills and bank account statements, there are plenty of hidden or additional charges that go largely unnoticed and might be affecting your bottom line. So as for your investment accounts... the only real way to know is to investigate what’s inside…there may be some surprises." Learn more from Roger Gershman at: http://www.forbes.com/sites/rogergershman/2014/06/03/you-probably-have-no-idea-what-you-pay-your-financial-advisor-in-fees-heres-why/

Why There's No Financial Advice for Most Americans

“America's middle class needs a lot of help managing its finances. The financial industry isn't providing much.”

“The latest failed experiment in bringing affordable financial advice to the masses is online platform Nestwise. The startup was shut down on Sept. 1, despite backing by the U.S.’s largest independent broker-dealer, LPL Financial Holdings Inc.”

“In May 2012, then-LPL senior executive Esther Stearns, 53, launched Nestwise; she left the company last month. Stearns, who says she can’t discuss the decision to close Nestwise, agreed to talk about the lessons learned from the startup and whether eventually there will be cost-effective ways to get advice to those who arguably need it most.” Read the interview by Ben Steverman for Bloomberg News at: http://www.businessweek.com/news/2013-10-22/why-theres-no-financial-advice-for-most-americans